Check my workCheck My Work button is now enabled

Item10

Item 10

Time Remaining 1 hour 30 minutes 6 seconds

01:30:06

At the beginning of 2016, Metatec Inc. acquired Ellison Technology Corporation for $610 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired:

Plant and equipment (depreciable assets)	$	151	million
Patent		41	million
Goodwill		110	million

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 impaired. The following amounts have been determined:

Plant and equipment:
Undiscounted sum of future cash flows	$	81	million
Fair value		61	million
Patent:
Undiscounted sum of future cash flows	$	20	million
Fair value		13	million
Goodwill:
Fair value of Ellison Technology Corporation	$	461	million
Fair value of Ellison's net assets (excluding goodwill)		400	million
Book value of Ellison's net assets (including goodwill)		480	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. Required 1 Required 4 Determine the amount of any impairment loss to be recorded, if any, for the three assets. (Enter your answers in millions. Round your final answers to nearest whole dollar.) Impairment Loss Plant and equipment Patent Goodwill million million million