Destin Company recently acquired several businesses and recognized goodwill in each acquisition. Destin has allocated the resulting goodwill to its three reporting units: Sand Dollar, Salty Dog, and Baytowne. In its annual review for goodwill impairment, Destin provides the following individual asset and liability values for each reporting unit:

Carrying Values	Fair Values
Sand Dollar
Tangible assets	$180,000	$190,000
Trademark	170,000	150,000
Customer list	90,000	100,000
Goodwill	120,000	?
Liabilities	30,000	30,000
Salty Dog
Tangible assets	$200,000	$200,000
Unpatented technology	170,000	125,000
Licenses	90,000	100,000
Goodwill	150,000	?
Baytowne
Tangible assets	140,000	150,000
Unpatented technology	–0–	100,000
Copyrights	50,000	80,000
Goodwill	90,000	?

The overall valuations for the entire reporting units (including goodwill) are $510,000 for Sand Dollar, $580,000 for Salty Dog, and $560,000 for Baytowne. To date, Destin has reported no goodwill impairments.

a. Which of Destin’s reporting units require both steps to test for goodwill impairment?

b. How much goodwill impairment should Destin report this year?

c. What changes to the valuations of Destin’s tangible assets and identified intangible assets should be reported based on the goodwill impairment tests?