During 2016, Lexie, Inc.acquired Lena, Inc.for $10,000,000.The fair market value of the net assets of Lena, Inc.was $8,500,000 on the date of purchase.During 2019, Lexie, Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
(a)Determine the amount of goodwill implied during 2016.
(b)Illustrate the effects on the accounts and the financial statements of the December 31, 2019, adjustment for the goodwill impairment.

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The Answer of During 2016, Lexie, Inc.acquired Lena, Inc.for $10,000,000.The fair market value of the net assets of Lena, Inc.was $8,500,000 on the date of purchase.During 2019, Lexie, Inc.determined the goodwill resulting from the Lena acquisition was impaired and had a value of $1,000,000.
(a)Determine the amount of goodwill implied during 2016.
(b)Illustrate the effects on the accounts and the financial statements of the December 31, 2019, adjustment for the goodwill impairment.