Question 4Goodwill, impairment. (15 points) On January 1, 2020, Kennison Company paid $1,000,000 to acquire all of the common stock of Lawrence Company, which became a division of Kennison. Lawrence reported the following balance sheet at the time of the acquisition: Assets Cash Accounts receivable PP&E (net) Trademarks $200,000 1,300,000 Liabilities and Stockholders' Equity $ 900,000 Accounts payable 400,000 Long-term note payable 800,000 Total liabilities 100,000 Common stock Retained earnings $2,200,000 Total liabilities and stockholders' equity 1,500,000 $300,000 400,000 Total assets 700,000 $2,200,000 Kennison and Lawrence agree that the fair market value equals to the reported value for all assets and liabilities. On December 31, 2021, Lawrence reports the following balance sheet information: Current assets Noncurrent assets (including goodwill recognized in purchase) Current liabilities Long-term liabilities $1,500,000 1,000,000 (600,000) (900,000) It is determined that the fair value of the Lawrence division is $1,200,000 on December 31, 2021. Instructions (1) Compute the amount of goodwill recognized, if any, on January 1, 2020. (3 points) (2) Prepare the entry to record the purchase of Lawrence on Kennison's books. (4 points) Debit Credit Account (3) Determine the impairment loss, if any, to be recorded on December 31, 2021. (3 points) _impairment loss is recorded, because (4) Assume that the fair value of the Lawrence division is $800,000 instead of $1,200,000 on December 31, 2021. (5 points) (a) Find out the impairment loss (if any) of Goodwill on December 31, 2021. (3 points) 000 - Prepare the journal entry to record the impairment loss of Goodwill. If there is no impairment ss, write "none needed." (2 points) Account Debit Credit