AS OF DECEMBER 31, 2017 (IN MILLIONS) Cash Accounts receivable Property, plant,

ID: 2569080 • Letter: A

Question

AS OF DECEMBER 31, 2017 (IN MILLIONS) Cash Accounts receivable Property, plant, and equipment (net) Goodwill Less: Notes payable Net assets $62 211 2,606 212 (2,601) $490 The purpose of the Kingbird Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $440 million. Management has also received an offer to purchase the division for $330 million. All identifiable assets' and llabilltles' book and falr value amounts are the same (a) Your answer is partially correct. Try again Prepare the journal entry to record the impairment at December 31, 2017. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Loss on Impairment 50 Goodwil 50 Hw #10 Questions/Exe

Explanation / Answer

Date

Accounts title and explanation

Debit

Credit

Loss on Impairment (490-330)

160

Goodwill

160

Being recognition of Impairment Loss

Given Fair Value of the Division (in Millions)

330

Carrying amount of division (In Millions)

490

Impairment Loss (in Millions)

160