Presented below is net asset information related to the Shamrock Division of Santana, Inc. Shamrock Division Net Assets As of December 31, 2025 (in millions) Cash $67 Accounts receivable 200 Property, plant, and equipment (net) 2,611 Goodwill 217 Less: Notes payable Net assets (2,606) $489 The purpose of the Shamrock Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $410 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiable assets' and liabilities' book and fair value amounts are the same. (a) Prepare the journal entry to record the impairment at December 31, 2025. (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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Presented below is net asset information related to the Shamrock Division of Santana, Inc. Shamrock Division Net Assets As of December 31, 2025 (in millions) Cash $67 Accounts receivable 200 Property, plant, and equipment (net) 2,611 Goodwill 217 Less: Notes payable Net assets (2,606) $489 The purpose of the Shamrock Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be $410 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All identifiable assets' and liabilities' book and fair value amounts are the same. (a) Prepare the journal entry to record the impairment at December 31, 2025. (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. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Presented below is net asset information related to the Shamrock Division of Santana, Inc.
Shamrock Division
Net Assets
As of December 31, 2025
(in millions)
Cash
$67
Accounts receivable
200
Property, plant, and equipment (net)
2,611
Goodwill
217
Less: Notes payable
Net assets
(2,606)
$489
The purpose of the Shamrock Division is to develop a nuclear-powered aircraft. If successful, traveling delays associated with
refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is
deciding whether a write-down at this time is appropriate. Management estimated its future net cash flows from the project to be
$410 million. Management has also received an offer to purchase the division for $335 million (deemed an appropriate fair value). All
identifiable assets' and liabilities' book and fair value amounts are the same.
(a)
Prepare the journal entry to record the impairment at December 31, 2025. (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. List
debit entry before credit entry.)
Account Titles and Explanation
Debit
Credit
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