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Category > Accounting Posted 13 Jul 2017 My Price 6.00

Intermediate Accounting,

Hello, attached is one question that I need a little help on.

Exercise 12-14 (Part Level Submission)

Presented below is net asset information related to the Teal Mountain Division of Santana, Inc.

TEAL MOUNTAIN DIVISION NET ASSETS AS OF DECEMBER 31, 2017 (IN MILLIONS)
Cash	$71
Accounts receivable	204
Property, plant, and equipment (net)	2,615
Goodwill	200
Less: Notes payable	(2,610	)
Net assets	$480

The purpose of the Teal Mountain 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 $430 million. Management has also received an offer to purchase the division for $330 million. All identifiable assets’ and liabilities’ book and fair value amounts are the same.

(a)

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 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

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QuickHelper

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Status NEW Posted 13 Jul 2017 06:07 AM My Price 6.00

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