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Information has been collected regarding Orange Company's cash-generating unit that includes goodwill. At 31 December 20X5, the assets of the Orange Company's cash-generating unit are shown as follows (in millions) on the company's SFP: Cost Accumulated Depreciation Net Book Value Goodwill $ 1,370 $ 0 $ 1,370 Equipment 5,050 3,480 1,570 Building 7,620 2,620 5,000 Patent rights 950 360 590 $ 14,990 $ 6,460 $ 8,530 An impairment test indicates that the recoverable amount assigned to the assets of this CGU is $6,250 million. The assets are not separable-they must be operated or sold together as a group. Required: 1. Prepare an adjusting journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate percentage answers to the nearest whole number (i.e. 0.12 should be considered as 12%) and final answers to the nearest whole dollar amount. Enter the amounts in millions.)

Information has been collected regarding Orange Company's cash-generating unit that includes goodwill. At 31 December 20X5, the assets of the Orange Company's cash-generating unit are shown as follows (in millions) on the company's SFP: Cost Accumulated Depreciation Net Book Value Goodwill $ 1,370 $ 0 $ 1,370 Equipment 5,050 3,480 1,570 Building 7,620 2,620 5,000 Patent rights 950 360 590 $ 14,990 $ 6,460 $ 8,530 An impairment test indicates that the recoverable amount assigned to the assets of this CGU is $6,250 million. The assets are not separable-they must be operated or sold together as a group. Required: 1. Prepare an adjusting journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate percentage answers to the nearest whole number (i.e. 0.12 should be considered as 12%) and final answers to the nearest whole dollar amount. Enter the amounts in millions.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Information has been collected regarding Orange Company's cash-generating unit that includes goodwill. At 31 December 20X5, the assets of the Orange Company's cash-generating unit are shown as follows (in millions) on the company's SFP: Cost Accumulated Depreciation Net Book Value Goodwill $ 1,370 $ 0 $ 1,370 Equipment 5,050 3,480 1,570 Building 7,620 2,620 5,000 Patent rights 950 360 590 $ 14,990 $ 6,460 $ 8,530 An impairment test indicates that the recoverable amount assigned to the assets of this CGU is $6,250 million. The assets are not separable-they must be operated or sold together as a group. Required: 1. Prepare an adjusting journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate percentage answers to the nearest whole number (i.e. 0.12 should be considered as 12%) and final answers to the nearest whole dollar amount. Enter the amounts in millions.)
Transcribed Image Text:Information has been collected regarding Orange Company's cash-generating unit that includes goodwill. At 31 December 20X5, the assets of the Orange Company's cash-generating unit are shown as follows (in millions) on the company's SFP: Cost Accumulated Depreciation Net Book Value Goodwill $ 1,370 $ 0 $ 1,370 Equipment 5,050 3,480 1,570 Building 7,620 2,620 5,000 Patent rights 950 360 590 $ 14,990 $ 6,460 $ 8,530 An impairment test indicates that the recoverable amount assigned to the assets of this CGU is $6,250 million. The assets are not separable-they must be operated or sold together as a group. Required: 1. Prepare an adjusting journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate percentage answers to the nearest whole number (i.e. 0.12 should be considered as 12%) and final answers to the nearest whole dollar amount. Enter the amounts in millions.)
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