My first Magazine AC 501 All Assignments | Page 10

also occur. To date, management has not had much success and is
deciding whether a writ-down at this time is appropriate. Management
estimated its future net cash flows from the project to be $ 400 million.
Management has also received an offer to purchase the division for $
335 million. All identifiable assets’ and liabilities’ book and fair value
amounts are the same.
Instructions
Prepare the journal entry (if any) to record the impairment at
December 31, 2008.
At December 31, 2009, it is estimated that the division’s fair value
increased to $ 345 million. Prepare the journal entry (if any) to record
this increase in fair value.
E14-6: (Entries for Available-for-sale and Trading Securities) The
following information is available Barkley Company at December 31,
2008, regarding its investments.
Securities
Cost
Fair Value
3,000 shares of Myers Corporation Common Stock
$ 48,000 $ 40,000
1,000 shares of Cole Incorporated Preferred Stock
22,000 25,000
$ 65,000
$ 70,000
Instructions