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)Your answer is correct. (b)At December 31, 2021, it is estimated that the division's fair value increased to $347 million. Prepare the journal entry to recordthis increase in fair value. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titlesare automatically indented when amount is entered. Do not indent manually.)Account Titles and ExplanationDebitCrediteTextbook and MediaList of Accounts

Solution:- Introduction:- As the sum of estimated future net cash flows is less than Book value of Net Assets, there is impairment on AssetRequirement:-1 Accounting tittles and explanations Debit Credit Loss on impairment $151,000,000 To goodwill $151,000,000 Note:- Loss on impairment =$486,000,000-$335,000,000 =$151,000,000 Requirement:-2 Accounting tittles and explanations Debit Credit No entry $0 No entry $0 Note:- Restoration of impairment loss is not permitted Thank you....

Business

Accounting

(b) At December 31, 2021, it is estimated that the division's fair value increased to $347 million. Prepare the journal entry to record this increase in fair value. (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

(b) At December 31, 2021, it is estimated that the division's fair value increased to $347 million. Prepare the journal entry to record this increase in fair value. (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

See similar textbooks

Similar questions

Give me correct answer with explanation
it was wrong i need help
Selected accounts of Beam Electrical, Inc., at November 30, 2018, follow. (Click the icon to view the accounts.) Read the requirements. Requirement 1. Prepare the entity's closing entries. Begin by closing out the revenue accounts. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Accounts Debit Credit Nov
Please do not give solution in image format ?
Required information [The following information applies to the questions displayed below.] The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $39,200. September 17, 2021 Receive $23,500 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $54,200. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $43,500 from customers for services provided in 2022. December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received. 2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.
On January 1, 2022, Sandhill Co. had a balance of $411,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. Jan. 2 Purchased a patent (7-year life) $307,650. July 1 Sept. 1 Acquired a 9-year franchise; expiration date July 1, 2,031, $576,000. Research and development costs $178,500.
Wildhorse Company, organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025. 1/2/25 Purchased patent (8-year life) 4/1/25 Purchase goodwill (indefinite life) 7/1/25 Purchased franchise with 10-year life; expiration date 7/1/35 8/1/25 Payment of copyright (5-year life) 9/1/25 Research and development costs $360,800 361,000 441,000 Debit 169,200 231,000 $1,563,000 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Credit
DETERMINE THE BALANCES OF THE FOLLOWING ACCOUNTS AS OF SEPTEMBER 30, 2017. (FORMAT ANSWERl: 1,000,000) Entity A began operation to provide credit collection services on September 2020. The Unadjusted Trial Balance as of September 30, 2020 is as shown below: Entity A Trial Balance September 30, 2020 Cash and Cash Equivalent 174,000 Accounts Receivable 96,200 Office Supplies 10,500 Prepaid Insurance 24,000 Equipment 300,000 Notes Payable 100,000 Accounts Payable 123,500 Unearned Service Income 50,000 A, Capital 200,000 A, Drawings 6,000 Service Income 176,200 Salaries Expense 12,000 Transportation Expense 13,000 Rent Expense 12,000 MIscellaneous Expenses 2,000 649,700 649,700 Additional Data 1. Unused supplies on September 30, 2020 is P7,500 2. The equipment was acquired on September 1, 2017 with useful life of 5 years and with estimated salvage value of P30,000 3. Interest on the notes payable is 18%. The note was issued on September 1, 2020. 4. The prepaid insurance is for the period…
Please do not give image format and solve with explanation
On July 15, 2024, the Niche Car Company purchased 2,800 tires from the Treadwell Company for $35 each. The terms of the sale were 2/10, ¹/30 . Niche uses a perpetual inventory system and the net method of accounting for purchase discounts.
Please don't give image format