8 5 pts Assume Little division was acquired by Big Company on May 31, 2019 and all acquisition journal entries were properly recorded. At December 31, 2019, Little division has the following book values on the balance sheet: Current assets $ 300,000 Noncurrent assets (including goodwill recognized in purchase) 1,200,000 Current liabilities Long-term liabilities Net assets (350,000) (250.000) $900.000 On December 31, 2019, it is determined that the fair market value of the Little reporting unit is $850,000. The book value for Little's net assets (excluding goodwill) is the same as fair value, except for a large piece of equipment included in noncurrent assets. The book value of the equipment is $250,000, the expected future cash flows are $262,000, and the estimated fair value is $265,000. Assume we have "qualitatively assessed" and determined that the Little reporting unit is "more likely than not" impaired. REQUIRED: Ignore your answer to Question 7 and assume that the amount of goodwill recognized was $325,000 during the initial acquisition of Little Division. Prepare the journal entry to record the goodwill impairment loss, if any, on December 31, 2019. If no entry is required, state that and provide support for your answer. Question 9 4 pts In 2018, assume Genes Co. owns a CRSPR machine (a piece of equipment used in gene editing) with a net book value of $15,000,000. Genes Co. learns that Congress has passed a law that bans research on genetically modified broccoli and President Stephan plans to sign it. As a result, Genes Co. believes the CRSPR machine might be impaired. Genes Co. identifies an opportunity to move overseas and continue its research, and therefore believes the CRSPR machine will generate $10,000,000 in undiscounted future cash flows over the next 4 years. With competitors also selling their CRSPR machines, however, the fair value of the machine has dropped to $6,000,000. If Genes Co. records a journal entry for impairment, which of the following will be part of the entry: Debit Impairment Expense (1-E) 9,000,000 Credit Equipment (B-A) 5,000,000 Debit Equipment (B-A) 5,000,000 O Debit Impairment Expense (1-E) 5,000,000 None of the above