Question $4$ of $8$ Question $4$ of $8$

$\frac{0\mathrm{.}63}{10}$

The following is net asset information for the Dhillon Division of Sheffield Inc.:

The purpose of the Dhillon Division $($also identified as a reporting unit or cash$-$generating unit$)$ is to develop a nuclear$-$powered aircraft. If successful, travelling delays that are associated with refuelling could be greatly reduced, and operational efficiency would increase significantly.

To date, management has not had much success and is deciding whether a writedown of goodwill is appropriate at this time. Management has prepared the following estimates for the reporting unit or cash$-$generating unit:

Undiscounted future net cash flows are approximately $$410$ million. Your answer is partially correct.

Under ASPE, determine if there is any impairment and prepare any necessary entry on December $31,2023.($Credit account

titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select ${?}^{-No}$

entry" for the account titles and enter O for the amounts. List debit entry before credit entry. ENTER AMOUNTS IN

MILLIONS.$)$

List of Accounts

The following is net asset information for the Dhillon Division of Sheffield Inc.:

NET ASSETS

As at December $31,2023$

$($in millions$)$

Cash

Accounts receivable

Property, plant, and equipment $($net$)$

Goodwill

Less: Notes payable

Net assets

Book Value

$$60$

$229$

$2,638$

$206$

$(2,602)$

$$531$

Fair Value

Excluding

Goodwill

$$60$

$229$

$2,821$

$(2,602)$

The purpose of the hillon Division $($also identified as a reporting unit or cash$-$generating unit$)$ is to develop a nuclear$-$powered aircraft. If successful, travelling delays that are associated with refuelling could be greatly reduced, and operational efficiency would increase significantly.

To date, management has not had much success and is deciding whether a writedown of goodwill is appropriate at this time.

Management has prepared the following estimates for the reporting unit or cash$-$generating unit:

$1.$ Undiscounted future net cash flows Future value in use is approximately $$524$ million.

$3.$ Sale of the unit would yield $$353$ million and selling costs would total $$6$ million.

$0\mathrm{.}63/10$

$($a$)$

Your answer is partially correct.

Under ASPE, determine if there is any impairment and prepare any necessary entry on December $31,2023.($Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No entry" for the account titles and enter $0$ for the amounts. List debit entry before credit entry. ENTER AMOUNTS IN MILLIONS.$)$

Date

Dec. $31,2023$

Account Titles and Explanation

Loss on Impairment

Debit

Creditare approximately $$410$ million.