Problem 11-12 Depreciation and amortization; impairment [L011-2, 11-4, 11-8 At the beginning of 2016, Metatec Inc. acquired Ellison Technology Corporation for $600 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired: Plant and equipment (depreciable assets) $ 150 million Patent 40 million 100 million Goodwil1 The plant and equipment are depreciated over a 10-year useful life on a straight-line basis. There is no estimated residual value. The patent is estimated to have a 5-year useful life, no residual value, and is amortized using the straight-line method. At the end of 2018, a change in business climate indicated to management that the assets of Ellison might be Impalred. The following amounts have been determined: Plant and equipments Undiscounted sum of future cash flows Pair value $ 80 million 60 million Patentt Undiscounted sum of future cash flows Fair value $ 20 million 13 miliion Goodvil11 Fair value of Ellison Technology Corporation rair value of tilBOE's net assets (excluding goodwin) $ 450 mil1ion 390 mi llion 470 million After first recording any impairment losses on plant and equipment and the patent Required 1. Compute the book value of the plant and equipment and patent at the end of 2018. 4. Determine the amount of any impairment loss to be recorded, if any, for the three assets. Complete this question by entering your answers in the tabs below. Undiscounted sum of future cash flows Pair value 80 mil1lion 60 million Patent Undiscounted sum of future cash flown Fair value s 20 million 13 million Goodwil1 Fair value of Ellison Technology Corporation Fair value of Ellison's net assets (excluding goodwill) Book value of Ellison's net assets (including goodwi11) s 450 mi1lion 390 mi11ion 470 million* ped After first recording any impairment losses on plant and equipment and the patent. Required 1. Compute the book value of the plant and equipment and patent at the end of 2018. 4. Determine the amount of any impairment loss to be recorded, if any, for the three assets. Complete this question by entering your answers in the tabs below. rint Required 1 Required 4 Compute the book value of the plant and equipment and patent at the end of 2018. (Enter your answers in millions.) Plant and equipment Patent million million Required 4 Undiscounted sum of future cash flowa Fair value 20 million 13 million Goodwil1 Fair value of Ellison Technology Corporation Pair value of Ellison's net assets (excluding goodwill) Book value of Ellison' net assets (including goodwil1) s 450 million ts 390 million 470 million* kpped After first recording any impairment losses on plant and equipment and the patent Required 1. Compute the book value of the plant and equipment and patent at the end of 2018. 4. Determine the amount of any impairment loss to be recorded, if any, for the three assets. eBook Complete this question by entering your answers in the tabs below. Print Required 1 Required 4 eferences Determine the amount of any impairment loss to be recorded, if any, for the three assets. (Enter your answers in millions.) Plant and equipment Patent Goodwl million million million Required 1 Required
