Aspro Division is considered to be an individual reporting unit of Tabor Company. Tabor acquired the division by issuing 100,000 shares of its common stock with a market price of $7.60 each. Tabor management was able to identify assets with fair values of $810,000 and liabilities of $190,000 at the date of acquisition. At the end of the first year, the reporting unit had assets with a fair value of $950,000, and the fair value of the reporting entity was $930,000. Tabor’s accountants concluded it must recognize impairment of goodwill in the amount of $30,000 at the end of the first year.

Required
a. Determine the fair value of the reporting unit’s liabilities at the end of the first year. Show your computation.
b. If the reporting unit’s liabilities at the end of the period had been $70,000, what would the fair value of the reporting unit have to have been to avoid recognizing an impairment of goodwill? Show your computation.