Information has been collected regarding Pindea Company's cash-generating unit that includes goodwill. At December 31, 2021, the assets of the Pindea Company's cash-generating unit are shown as follows on the company's statement of financial position: Goodwill Building Cost Equipment 126,500 Patent rights $ 25,000 505,000 30,000 $ 686,500 Accumulated Depreciation 30,850 200,150 18,500 $ 249,500 Net Book Value $ 25,000 95,650 304,850 11,500 $ 437,000 An impairment test indicates that the fair value of Pineda Company's cash- generating unit's assets is $350,000. The assets are not separable - they must be operated or sold together as a group. Required: Indicate the net book value of each asset after the write-down and prepare an adjusting journal entry to record the impairment.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Information has been collected regarding Pindea Company's cash-generating
unit that includes goodwill. At December 31, 2021, the assets of the Pindea
Company's cash-generating unit are shown as follows on the company's
statement of financial position:
Goodwill
Equipment
Building
Patent
rights
Cost
$
126,500
25,000
505,000
30,000
$ 686,500
Accumulated
Depreciation
$
30,850
200,150
18,500
$
249,500
Net Book
Value
$ 25,000
95,650
304,850
11,500
$ 437,000
An impairment test indicates that the fair value of Pineda Company's cash-
generating unit's assets is $350,000. The assets are not separable - they must
be operated or sold together as a group.
Required:
Indicate the net book value of each asset after the write-down and prepare an
adjusting journal entry to record the impairment.
Transcribed Image Text:Information has been collected regarding Pindea Company's cash-generating unit that includes goodwill. At December 31, 2021, the assets of the Pindea Company's cash-generating unit are shown as follows on the company's statement of financial position: Goodwill Equipment Building Patent rights Cost $ 126,500 25,000 505,000 30,000 $ 686,500 Accumulated Depreciation $ 30,850 200,150 18,500 $ 249,500 Net Book Value $ 25,000 95,650 304,850 11,500 $ 437,000 An impairment test indicates that the fair value of Pineda Company's cash- generating unit's assets is $350,000. The assets are not separable - they must be operated or sold together as a group. Required: Indicate the net book value of each asset after the write-down and prepare an adjusting journal entry to record the impairment.
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