The abrasives group of Chemical Products Inc. (CPI) has been suffering a decline in its business, due to new product introductions by competitors. At 31 December 20X5, the assets of the abrasives cash-generating unit are shown as follows (in millions) on the company's SFP: Equipment (10-year life) Fixtures (10-year life) Patent rights (40-year life) No Cost $2,150 1 970 640 $3,760 Transaction 1 Accumulated Depreciation $1,090 An impairment test indicates that the recoverable amount of the abrasives cash-generating unit's assets is $1,110 million. The assets are not separable-they must be operated or sold together as a group. No individual asset has a determinable individual fair value less cost to disposal. Required: 1. Prepare an adjusting journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.) 290 370 $1,750 Net Book Value $1,060 680 270 $2,010 Answer is complete but not entirely correct. General Journal Impairment loss-Abrasives group Accumulated depreciation - Equipment Accumulated depreciation - Fixtures Accumulated amortization - Patent rights Net book value of the assets after one year Answer is complete but not entirely correct. ✔ ♥ ✪ 1,682,000,000 Debit 900,000,000 2. What would be the net book value of the assets after one year if no impairment was recorded? Assume that straight-line depreciation is used. (Enter your answer in millions.) Credit 474,626,866 304,477,612 120,895,522

Chapter22: Accounting For Changes And Errors.