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
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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
eTextbook and Media
List of Accounts
Transcribed Image Text: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 eTextbook and Media List of Accounts
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)
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)
Transcribed Image Text: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) 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)
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