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 $8.00 each. Tabor management was able to identify assets with fair values of $818,000 and liabilities of $203,000 at the date of acquisition. At the end of the first year, the reporting unit had assets with a fair value of $956,000, and the fair value of the reporting entity was $936,000. Tabors accountants concluded it must recognize impairment of goodwill in the amount of $26,000 at the end of the first year.

Required:

a.	Determine the fair value of the reporting units liabilities at the end of the first year.

b.	If the reporting units liabilities at the end of the period had been $71,000, what would the fair value of the reporting unit have to have been to avoid recognizing an impairment of goodwill?