The following information is available for Minneapolis Mills Canned Vegetable Division, as of the balance sheet reporting
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Question:
- The following information is available for Minneapolis Mill’s Canned Vegetable Division, as of the balance sheet reporting date of March 31, 2019:
Carrying value of the division, without Goodwill $2,440,000
Goodwill of the Canned Vegetable Division 2,000,000
Total carrying value of the division $4,440,000
Minneapolis Mills no longer plans to invest in maintaining this division and expects to complete a sale of the division in three years. Estimated cash flows for the Canned Vegetable Division are as follows:
Year ending 3/31/2020 400,000
Year ending 3/31/2021 200,000
Year ending 3/31/2022, including sale price 1,500,000
The appropriate discount rate is 8%.
What is the amount of the impairment to Goodwill (if any)?
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
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