Grier purchased Walters Company several years ago. Walters become a reporting unit of Griers. At the end of 2014, Grier had a net book value of $1.6 million which includes $400,000 of goodwill. A goodwill impairment test is done as part of the year end closing process. Grier estimates the fair value of Walters to be $1.4 million. The fair value of Walters identifiable net assets, excluding goodwill, is $1.3 million.
Required:
1.) Determine if goodwill is impaired
2.) Prepare the journal entry required for the impairment if necessary.