Practical Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple’s identifiable net assets had a fair value of $390,000. The assets acquired in the purchase of Simple are considered to be a separate reporting unit of Practical. The carrying value of the Simple reporting unit’s net assets at December 31, 20X4, is $500,000.

Required

Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Simple reporting unit is determined to be

a. $530,000.

b. $485,000.

c. $450,000.