**Asset Impairment Analysis**For each of the following scenarios, determine whether an asset has been impaired (Y for yes and N for no), and identify the amount of loss that should be recorded.| **Scenario** | **Book Value** | **Estimated Future Cash Flows** | **Fair Value** | **Is Asset Impaired?** | **Amount of Loss** ||-------------------------|----------------|---------------------------------|----------------|------------------------|--------------------|| a. **Machine** | $15,500 | $10,000 | $9,500 | Y | $6,000 || b. **Copyright** | $31,000 | $41,000 | $37,900 | N | || c. **Factory building** | $58,000 | $29,000 | $27,000 | Y | $31,000 || d. **Building** | $227,000 | $227,000 | $200,000 | N | |- **Machine**: Impairment recognized with a loss of $6,000.- **Copyright**: No impairment recorded.- **Factory building**: Impairment recognized with a loss of $31,000.- **Building**: No impairment recorded.The table illustrates how to evaluate asset impairment based on book value, estimated cash flows, and fair value. The amount of loss is calculated when an asset is deemed impaired. **Transcript for Educational Website**### Business Acquisition Example: Goodwill Calculation**Scenario:**Elizabeth Pie Company has been in operation for 50 years, building a loyal customer base in the restaurant sector. Giant Bakery Inc. has proposed to purchase Elizabeth Pie Company for $5,000,000. The details related to the company’s assets and valuation are as follows:- The book value of Elizabeth Pie's recorded assets and liabilities at the time of the offer is $4,300,000, while the fair value is $4,500,000.- In addition, Elizabeth Pie holds a patent for a pie crust fluting machine they invented. This patent, with a fair value of $300,000, was developed internally and thus was never recorded on the books.- The goodwill from loyal customers is estimated at $310,000, which was also not recorded by the company.**Task:**If Elizabeth Pie Company’s management decides to accept Giant Bakery’s offer of $5,000,000, calculate the amount of goodwill Giant Bakery should record on the purchase date.**Calculation:**To compute goodwill in this acquisition, consider the purchase price and the fair value of identifiable net assets:1. **Fair Value of Identifiable Net Assets:** - Fair value of recorded assets and liabilities: $4,500,000 - Add: Fair value of the patent: $300,000 - Total fair value of identifiable net assets: $4,800,0002. **Goodwill Calculation:** - Purchase Price: $5,000,000 - Less: Fair value of identifiable net assets: $4,800,000 - Goodwill: $200,000Therefore, the goodwill to be recorded by Giant Bakery upon acquisition is $200,000.

Since you have posted two different questions, we will do the first one for you. To get the other…

For each of the following scenarios, select whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should be recorded. a. Machine Copyright b. C. Factory building d. Building $ Book Value 15,500 31,000 58,000 227,000 Answer is not complete. Estimated Future Cash Flows $ 10,000 41,000 29,000 227,000 Fair Value $ 9,500 37,900 27,000 200,000 Is Asset Impaired? Y N Y N ✓ ✓ Amount of Loss

For each of the following scenarios, select whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should be recorded. a. Machine Copyright b. C. Factory building d. Building $ Book Value 15,500 31,000 58,000 227,000 Answer is not complete. Estimated Future Cash Flows $ 10,000 41,000 29,000 227,000 Fair Value $ 9,500 37,900 27,000 200,000 Is Asset Impaired? Y N Y N ✓ ✓ Amount of Loss

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

ok D ences General Optic Corporation operates a manufacturing plant in Arizona. Due to a significant decline in demand for the product manufactured at the Arizona site, an impairment test is deemed appropriate. Management has acquired the following information for the assets at the plant Cost Accumulated depreciation General's estimate of the total cash flows to be generated by selling the products manufactured at its Arizona plant, not discounted to present value The fair value of the Arizona plant is estimated to be $14 million. Required: 1. Determine the amount of impairment loss. 2. If a loss is indicated, prepare the entry to record the loss. 3. & 4. Determine the amount of impairment loss assuming that the estimated undiscounted sum of future cash flows is (3) $15 million instead of $16.2 million and (4) $24.35 million instead of $16.2 million. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Impairment loss Req 3 and 4 Determine the amount of…
I need to solve this depreciation problem but not really sure how.
The graph was not completed, For each of the depreciation schedules shown on the Patterson Planning Corp., fill in the following information. If an amount box does not require an entry, leave it blank. A B C Useful Life 5 4 ??? Residual Value ????? 0 0 Asset Cost 25,000 0 0 Total Operating Hours 0 0 ???
Don't provide answer in image format
A9
A cash-generating unit comprises the following assets: £000 Goodwill Land Plant and equipment Select one: a. £2,285,716 b. £2,400,000 O c. £300,000 O d. e. 440 £2,021,052 £2,111,472 2,560 One of the pieces of equipment, carried at £160,000, is damaged and will have to be scrapped. The recoverable amount of the cash-generating unit is estimated at £3,000,000. What will be the carrying amount of the land after the impairment loss has been recognised? 800 3,800
Tt1.
The net assets of Fragrance, a cash generating unit (CGU), are: $ Property, plant and equipment 200,000 Allocated goodwill 50,000 Product patent 20,000 Net current assets (at net realizable value) 30,000 Total 300,000 As a result of adverse publicity, Fragrance has a recoverable amount of only $200,000. What would be the value of Fragrance's property, plant, and equipment after the allocation of the impairment loss? $154,545 $170,000 $160,000 $133,333
kk. Subject :- Accounting