Alimama Inc. purchased a EV truck company, Yesla Inc. at $3,500,000 on December 31, 2020. The illustration presents that the statement of Yesla Inc. Yesla Inc. Statement of Financial Position As of December 31,2021 Property, plant, and equipment, net $1,000,000 Cash $50,000 Inventory $800,000 Account Receivable $500,000 Accounting Payable $300,000 Long-term Debt $1,200,000 Yesla Inc. Fair Values Property, plant, and equipment, net $3,000,000 Cash $50,000 Inventory $600,000 Account Receivable $500,000 Accounting Payable $300,000 Long-term Debt $1,200,000 Patent $300,000 On December 31, 2021, Alimama Inc. is reviewing Yesla Inc for purposes of its annual impairment testing. Alimama Inc. determines the fair value less costs to sell of Yesla is $3,000,000 and value-in-use is $2,600,000. Prepare the journal entry for recording the impairment loss.
Alimama Inc. purchased a EV truck company, Yesla Inc. at $3,500,000 on December 31, 2020. The illustration presents that the statement of Yesla Inc.
|
Yesla Inc. As of December 31,2021 |
|
|
Property, plant, and equipment, net |
$1,000,000 |
|
Cash |
$50,000 |
|
Inventory |
$800,000 |
|
|
$500,000 |
|
Accounting Payable |
$300,000 |
|
Long-term Debt |
$1,200,000 |
|
Yesla Inc. Fair Values |
|
|
Property, plant, and equipment, net |
$3,000,000 |
|
Cash |
$50,000 |
|
Inventory |
$600,000 |
|
Account Receivable |
$500,000 |
|
Accounting Payable |
$300,000 |
|
Long-term Debt |
$1,200,000 |
|
Patent |
$300,000 |
On December 31, 2021, Alimama Inc. is reviewing Yesla Inc for purposes of its annual impairment testing. Alimama Inc. determines the fair value less costs to sell of Yesla is $3,000,000 and value-in-use is $2,600,000. Prepare the journal entry for recording the impairment loss.
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