Saved On January 1, 20X1, Porta Corporation purchased Swick Company's net assets and assigned goodwill of $80,600 to Reporting Division K. The following assets and liabilities are assigned to Reporting Division K on the acquisition date Carrying Amount Cash Inventory Equipment Goodwill Accounts Payable Fair Value- $ 14,600 56,600 $ 14,600 176,000 80,600 30.600 71,600 196,000 30,600 Required: On December 31, 20X3, Porta must test goodwill for impairment. Determine the amount of goodwill to be reported for Division K and the amount of goodwill impairment to be recognized, if any, if Division K's fair value is determined to be a. $346,000. b. $286,000. c. $266,000. b Amount of Goodwill Goodwill Impairment 4. When an existing company creates a new subsidiary and transfers a portion of its assets and liabilities to the new entity Multiple Choice The original company records the difference between the carrying values and the fair values of the assets transferred to the new entity as goodwill. The new entity records both the assets and liabilities it received at fair values The new entity records both the assets and liabilities it received at the carrying values of the original company The original company records a gain or loss on the difference between its carrying values and the fair values of the assets transferred to the new entity of 2 Fook ences 3 Which of the following is the appropriate basis for valuing fixed assets acquired in a business combination carried out by exchanging cash for common stock? Multiple Choice Cost plus any excess of purchase price over book value of assets acquired. Book value. Historical cost Fair value