Question 3 (20 marks) Leon Corporation has the following transactions relating to its intangible assets: Goodwill related to acquisition of Hallway Corporation On 31 December 2019, Leon Corporation paid $3,400,000 to acquire all of the ordinary shares of Hallway Corporation, which became a division of Leon. Hallway Corporation reported the following statement of financial position at the time of the acquisition: Non-current assets Current assets $2,700,000 $900,000 Equity Non-current liabilities Current liabilities Total equity and liabilities $2,500,000 $500,000 $600,000 $3,600,000 Total assets $3,600,000 It was determined at the date of the purchase that the fair value of the non-current assets was 2,950,000 and that of current assets was 1,000,000 and all liabilities had the same fair value as its book value. At 31 December 2020, Hallway reports the following statement of financial position information: Current assets Non-current assets (including goodwill recognized in purchase) Current liabilities Non-current liabilities $800,000 $2,400,000 $700,000 $500,000 It is determined that the recoverable amount of the Hallway division is $1,900,000 at 31 December 2020. At 31 December 2021, Hallway's net assets as reported on the statement of financial position is $2,500,000, where the recoverable amount is $2,505,000. Patent On 1 January 2020, Leon Corporation applied for a patent with estimated useful life of 10 years, incurring legal costs of $60,000. At the end of 2020, based on new market research, Leon determined that the recoverable amount the patent was $48,000. On 30 June 2021, Leon incurred $9,000 of legal fees in a successful defense of its patent. At the end of 2021 recoverable amount of the patent is determined to be $52,000. Leon Corporation has financial year ended 31 December. Required (a) Compute the amount of goodwill recognized, if any, on 31 December 2019. (b) Record all the journal entries required for the goodwill in 2020 and 2021. (c) Record all the journal entries required for the patent in 2020 and 2021. (4 marks) (4 marks) (12 marks)