WINDSOR DIVISION NET ASSETS AS OF DECEMBER 31, 2017 (IN MILLIONS) $61 210 2,605

Question

WINDSOR DIVISION
NET ASSETS
AS OF DECEMBER 31, 2017
(IN MILLIONS)

$61

210

2,605

211

(2,600

)

Account Titles and Explanation

Debit

Credit

Presented below is net asset information related to the Windsor Division of Santana, Inc.

WINDSOR DIVISION
NET ASSETS
AS OF DECEMBER 31, 2017
(IN MILLIONS)

Cash

$61

Accounts receivable

210

Property, plant, and equipment (net)

2,605

Goodwill

211

Less: Notes payable

(2,600

)

Net assets $487
The purpose of the Windsor 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 $405 million. Management has also received an offer to purchase the division for $335 million. All identifiable assets’ and liabilities’ book and fair value amounts are the same.

Explanation / Answer

Solution:-

Explanation:-

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Journal Account titles and explanation Debit Credit Loss on Impairment 152,000,000 Goodwill 152,000,000

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