On January 1, 2012, Pancake Company acquired the net assets ofSyrup Company for $790,000 cash. The fair value of Syrup’sidentifiable net assets was $655,000 on this date. Pancake Companydecided to measure goodwill impairment using the present value offuture cash flows to estimate the fair value of the reporting unit(Syrup). The information for the subsequent year is as follows:Carrying value of Fair Value Present value Syrup’s IdentifiableSyrup’s Identifiable Year of Future Cash Flows Net Assets* NetAssets 2013 $700,000 $580,000 $595,000 * Identifiable net assets donot include goodwill.

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