Question
Alimama Inc. purchased a EV truck company, Yesla Inc. at $3,500,000 on December 31, 2020. The illustration presents that the statement of Yesla Inc. Yesla
Alimama Inc. purchased a EV truck company, Yesla Inc. at $3,500,000 on December 31, 2020. The illustration presents that the statement of Yesla Inc.
| Yesla Inc. Statement of Financial Position As of December 31,2021 | |
| Property, plant, and equipment, net | $1,000,000 |
| Cash | $50,000 |
| Inventory | $800,000 |
| Account Receivable | $500,000 |
| Accounting Payable | $300,000 |
| Long-term Debt | $1,200,000 |
| Yesla Inc. Fair Values | |
| Property, plant, and equipment, net | $3,000,000 |
| Cash | $50,000 |
| Inventory | $600,000 |
| Account Receivable | $500,000 |
| Accounting Payable | $300,000 |
| Long-term Debt | $1,200,000 |
| Patent | $300,000 |
|
|
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On December 31, 2021, Alimama Inc. is reviewing Yesla Inc for purposes of its annual impairment testing. Alimama Inc. determines the fair value less costs to sell of Yesla is $3,000,000 and value-in-use is $2,600,000. Prepare the journal entry for recording the impairment loss. (1 point)
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Financial and Managerial Accounting
Authors: Horngren, Harrison, Oliver
3rd Edition
978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978
