On January 2, 2018, Putney Industries acquired all of Steico Corporation's voting stock for $10,000. Steico's book value at the date of acquisition was $6,500. Total goodwill of $2,500 was recognized at the date of acquisition. Steico's reported assets and liabilities had book values that approximated fair value at the date of acquisition, but it had previously unreported customer lists (5-year life, straight-line) valued at $1,000.
It is now December 31, 2021, four years after the date of acquisition. Goodwill impairment for the years 2018-2020 totaled $300, and goodwill impairment for 2021 is $50. No impairment losses were reported for the customer lists for any year since acquisition.
December 31, 2021 trial balances for Putney and Steico are shown in the consolidation working paper that follows.

\begin{array}{|l|c|c|c|c|c|}\hline & \begin{array}{l}\text { Putney } \\\operatorname{Dr}(\mathrm{Cr})\end{array} & \begin{array}{l}\text { Steico } \\\operatorname{Dr}(\mathrm{Cr})\end{array} & \text { Dr } & \mathrm{Cr} & \begin{array}{l}\text { Consol. } \\\operatorname{Dr}(\mathrm{Cr})\end{array} \\\hline \text { Current assets } & \$ 5,000 & \$ 2,500 & & & \\\hline \text { Fixed assets, net } & 49,300 & 24,920 & & & \\\hline \text { ID intangibles } & - & \begin{array}{ll}-- & \\\end{array} & & & \\\hline \text { Investment in Steico } & 12,770 & -- & & & \\\hline \text { Goodwill } & - & \begin{array}{l}-- & \\\end{array} & & & \\\hline \text { Liabilities } & (22,000) & (17,000) & & & \\\hline \text { Capital stock } & (15,000) & (2,000) & & & \\\hline \text { Retained earnings, Jan. } 1 & (27,900) & (7,200) & & & \\\hline \mathrm{AOCl} \text {, Jan. } 1 & (600) & (400) & & & \\\hline \text { Sales revenue } & (25,000) & (12,000) & & & \\\hline \text { Equity in NI-Steico } & \text { (550) } & -- & & & \\\hline \text { Equity in } \mathrm{OCl} \text {-Steico } & (20) & \begin{array}{ll}-- & \\\end{array} & & & \\\hline \text { Cost of goods sold } & 20,000 & 7,000 & & & \\\hline \text { Operating expenses } & 4,000 & 4,200 & & & \\\hline \begin{array}{l}\text { Other comprehensive } \\\text { income }\end{array} &- & (20) & & & \\\hline \text { Total } & \$0 &\$0 & & & \\\hline\end{array}

Required
a. Calculate 2021 equity in net income of Steico, reported on Putney's separate books. Putney uses the complete equity method to account for its investment in Steico.
b. Fill in the eliminating entries (C), (E), (R), and (O) to consolidate the accounts of the two companies at December 31, 2021, using the consolidation working paper.
c. Present Putney's consolidated statement of income and comprehensive income for 2021, and its consolidated balance sheet at December 31, 2021.

Which of the Following Is a Reason Why Goodwill Impairment

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