P12.4 (LO 3, 4, 5) Groupwork (Goodwill, Impairment) On July 31, 2020, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division $ 600,000 500.000 2,400,000 Current assets $ 800,000 Current liabilities Noncurrent assets 2.700,000 Long-term liabilities Total assets $3,500,000 Stockholders' equity Total liabilities and stockholders' equity $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,750,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information. Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities Net assets $ 450,000 2,400,000 (700,000) (500,000) $1,650,000 Finally, it is determined that the fair value of the Conchita Division is $1,850,000. Instructions a. Compute the amount of goodwill recognized, if any, on July 31, 2020 b. Determine the impairment loss, if any, to be recorded on December 31, 2020 c. Assume that fair value of the Conchita Division is $1,600,000 instead of $1.850,000. Determine the impairment loss, if any, to be recorded on December 31, 2020, d. Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement un intencihle Assets) Montana Mai's Golf Inc. AIA