Less: Notes payable(2,612 )Net assets$486The purpose of the Kingbird Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refuelingcould be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is decidingwhether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $445 million.Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiableassets' and liabilities' book and fair value amounts are the same.(a)Prepare the journal entry to record the impairment at December 31, 2020. (If no entry is required, select "No Entry" for the accounttitles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCrediteTextbook and MediaList of Accounts Presented below is net asset information related to the Kingbird Division of Santana, Inc.Kingbird DivisionNet AssetsAs of December 31, 2020(in millions)Cash$73Accounts receivable206Property, plant, and equipment (net)2,617Goodwill202Less: Notes payable(2,612 )Net assets$486The purpose of the Kingbird Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refuelingcould be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is decidingwhether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $445 million.Management has also received an offer to purchase the division for $335 million (deemed an appropriate'fair value). All identifiableassets' and liabilities' book and fair value amounts are the same.(a)Prepare the journal entry to record the impairment at December 31, 2020. (If no entry is required, select "No Entry" for the accounttitles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)

Impairment of assets means reducing the book value of assets when carrying amount is more than…

Less: Notes payable (2,612 ) Net assets $486 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 $445 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). 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, 2020. (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

Less: Notes payable (2,612 ) Net assets $486 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 $445 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). 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, 2020. (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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Presented below is net asset information related to the Kingbird Division of Santana, Inc. Kingbird Division Net Assets As of December 31, 2020 (in millions) Cash $73 Accounts receivable 206 Property, plant, and equipment (net) 2,617 Goodwill 202 Less: Notes payable (2,612 ) Net assets $486 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 $445 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiable assets' and liabilities' book and fair value amounts are the same. (a) Your answer is partially correct. %23
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At December 31, 2020, Tamarisk, Inc. reported the following as plant assets. Land $ 3,670,000 Buildings $27,580,000 Less: Accumulated depreciation—buildings 12,950,000 14,630,000 Equipment 48,100,000 Less: Accumulated depreciation—equipment 4,630,000 43,470,000 Total plant assets $61,770,000 During 2021, the following selected cash transactions occurred. April 1 Purchased land for $2,040,000. May 1 Sold equipment that cost $1,140,000 when purchased on January 1, 2017. The equipment was sold for $684,000. June 1 Sold land purchased on June 1, 2011 for $1,600,000. The land cost $392,000. July 1 Purchased equipment for $2,300,000. Dec. 31 Retired equipment that cost $514,000 when purchased on December 31, 2011. The company received no proceeds related to salvage. Correct answer iconYour answer is correct. Journalize the above transactions. The company uses straight-line depreciation for…
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