This exercise consists of three parts.

Part A. On January 1, Year 1, Complete Company acquired 60 percent of the outstanding shares of Partial Company by paying $1,200,000 in cash. The fair value of Partial's identifiable assets and liabilities is $2,000,000 and $500,000, respectively.

Required:

Determine the possible amounts at which Complete Company should recog­nize goodwill from this business combination.

Part B. Assume the same facts as in part A, except Complete Company ac­quires 80 percent of Partial Company for $1,100,000.

Required:

Determine the possible amounts at which Complete Company should recog­nize goodwill from this business combination.

Part C. Assume the same facts as in part A and that Complete Company measured noncontrolling interest at the date of acquisition at the proportion­ate share of fair value of Partial Company's net assets. Complete Company determines that Partial Company is a separate cash-generating unit. At the end of Year 1, Complete Company develops the following estimates for Partial Company:

Fair value …………………………………                 $1,900,000

Costs to sell ………………………………                     $ 20,000

Present value of future cash flows ……       $ 1,860,000

Required:

Determine the amount of impairment loss, if any, to be recognized in the Year 2 consolidated income statement, and the amount at which Partial Com­pany's net assets, goodwill, and noncontrolling interest would be carried on the consolidated balance sheet at the end of Year 2.