Question
Kirby Corporation has three divisions. It purchased one division, Pritt Products, four years ago for $2 million. Unfortunately, Pritt experienced operating losses over the last
Kirby Corporation has three divisions. It purchased one division, Pritt Products, four years ago for $2 million. Unfortunately, Pritt experienced operating losses over the last three quarters. Kirby management is now reviewing the division for purposes of recognizing an impairment. The carrying value of Pritt Divisions net assets, including the associated goodwill is presented below:
| Assets | Fair Value |
| Cash | $200,000 |
| Accounts receivable | 300,000 |
| Inventory | 700,000 |
| PPE (net) | 800,000 |
| Goodwill | 900,000 |
| Liabilities | (500,000) |
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| Fair value of net assets | $2,400,000 |
Kirby determines the fair value of Pritt Division at the time of the impairment analysis is $1,900,000.The fair value and carrying value of the assets are the same.
Write the journal entry to record any impairment loss (if any).
| Date | Account | Debit | Credit |
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