Prepare any appropriate journal entries for goodwill impairment assuming that Oriole Construction & Paving is reporting under ASPE.
Prepare any appropriate journal entries for goodwill impairment assuming that Oriole Construction & Paving is reporting under ASPE.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Orioles Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that provides road maintenance services. The division was purchased three years ago for $3,130,000 and has been identified as a reporting unit. The net assets for the division including goodwill are as follows:
The fair value of the Alcott Maintenance Division reporting unit as a whole is estimated to be $3,008,000. Management determines that the unit’s value in use is $3,117,000.
| Cash | $229,000 | ||
| 295,000 | |||
| Inventory | 767,000 | ||
| Property, Plant & Equipment | 898,000 | ||
| Goodwill | 1,307,000 | ||
| Accounts Payable | (137,000 | ) | |
| Unearned Revenue | (70,000 | ) | |
| Net assets, at carrying amounts | $3,289,000 |
The fair value of the Alcott Maintenance Division reporting unit as a whole is estimated to be $3,008,000. Management determines that the unit’s value in use is $3,117,000.
Prepare any appropriate journal entries for goodwill impairment assuming that Oriole Construction & Paving is reporting under ASPE. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Account Titles and Explanation
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Debit
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Credit
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List of Accounts
Prepare any appropriate journal entries for goodwill impairment assuming that Oriole Construction & Paving is reporting under IFRS. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Account Titles and Explanation
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Debit
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Credit
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|
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List of Accounts
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