Ting Division Net Assets as of December 31, 2019 (in millions) HK$2,600 Property, plant, and equipment (net) 200 Goodwill 200 Accounts receivable 60 Cash Less: Notes payable (2,700) (8105 ni bon 3 HK$ 360 Net assets The purpose of the Ting Division (cash-generating unit) is to develop a nuclear-powered aircraft. If suc- cessful, 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 HK$400 million. Management has also received an offer to purchase the division for HK$335 million (fair value less costs to sell). All identifiable assets' and liabilities' book and fair value amounts are the same. Instructions a. Prepare the journal entry (if any) to record the impairment at December 31, 2019. D. At December 31, 2020, it is estimated that the division's recoverable amount increased to HKS345 million. Prepare the journal entry (if any) to record this increase in fair value. E12.16 (LO5) (Accounting for P&D a on a researal

Ting Division Net Assets as of December 31, 2019 (in millions) HK$2,600 Property, plant, and equipment (net) 200 Goodwill 200 Accounts receivable 60 Cash Less: Notes payable (2,700) (8105 ni bon 3 HK$ 360 Net assets The purpose of the Ting Division (cash-generating unit) is to develop a nuclear-powered aircraft. If suc- cessful, 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 HK$400 million. Management has also received an offer to purchase the division for HK$335 million (fair value less costs to sell). All identifiable assets' and liabilities' book and fair value amounts are the same. Instructions a. Prepare the journal entry (if any) to record the impairment at December 31, 2019. D. At December 31, 2020, it is estimated that the division's recoverable amount increased to HKS345 million. Prepare the journal entry (if any) to record this increase in fair value. E12.16 (LO5) (Accounting for P&D a on a researal

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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