Practical Corporation acquired all of the common stock of Simple Company for $450,000 on January 1, 20X4. On that date, Simple's identifiable net assets had a fair value of$390,000. The assets acquired in the purchase of Simple are considered to be a separate reporting unit of Practical. The carrying value of the Simple reporting unit's net assets at December 31, 20X4, is $500,000.

Required

Determine the amount of goodwill impairment, if any, that should be recognized at December 31, 20X4, if the fair value of the Simple reporting unit is determined to be$485,000.

Choose the corresponding cause or description of phenylketonuria.

a. a disorder caused by trisomy 21

b. a disorder caused by a recessive gene that fails to produce the enzyme phenylalanine hydroxylase

c. a disorder caused by the trisomy condition XXY

d. a condition caused by a recessive gene that causes an impairment in chloride ion transport across the cell membrane

e. a sex-linked trait that inhibits the production of certain photopigments

f. a disorder caused by the monosomy condition XO

Assume the same information as in the prior exercise, except that Pujols intends to dispose of the equipment in the coming year.

Instructions

a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020.

b. Prepare the journal entry (if any) to record depreciation expense for 2021.

c. The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $5,100,000. Prepare the journal entry (if any) necessary to record this increase. It is expected that the cost of disposal is$20,000.

Komissarov Company has a debt investment in the bonds issued by Keune Inc. The bonds were purchased at par for $400,000 and, at the end of 2017, have a remaining life of 3 years with annual interest payments at 10%, paid at the end of each year. This debt investment is classified as held-for-collection. Keune is facing a tough economic environment and informs all of its investors that it will be unable to make all payments according to the contractual terms. The controller of Komissarov has prepared the following revised expected cash flow forecast for this bond investment.

$$\begin{array}{cc} \text{\underline{\hspace{20pt}Dec. 31\hspace{20pt}}}&\text{\underline{Expected Cash Flows}}\\ \text{2018}&\text{\$\hspace{10pt}35,000}\\ \text{2019}&\text{\hspace{10pt}35,000}\\ \text{2020}&\underline{\text{\hspace{10pt}385,000}}\\ \text{Total cash flows}&\underline{\underline{\$\text{\hspace{5pt}455,000}}}\\ \end{array}$$

Instructions

• a. Determine the impairment loss for Komissarov at December 31, 2017.
• b. Prepare the entry to record the impairment loss for Komissarov at December 31, 2017.
• c. On January 15, 2018, Keune receives a major capital infusion from a private equity investor. It informs Komissarov that the bonds now will be paid according to the contractual terms. Briefly describe how Komissarov would account for the bond investment in light of this new information.

Assume the same information in the prior exercise, except that Suarez intends to dispose of the equipment in the coming year. It is expected that the cost of disposal will be $20,000.

Instructions

a. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020.

b. Prepare the journal entry (if any) to record depreciation expense for 2021.

c. The asset was not sold by December 31, 2021. The fair value of the equipment on that date is$5,300,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $20,000.

Which of the following is true about accounting for other-than-temporary impairments under IAS No. 39? a. Recoveries of OTT impairments for debt investments can be recognized in earnings. b. Recoveries of OTT impairments for equity investments can be recognized in earnings. c. The amount of OTT impairment calculated for a debt investment is the same regardless of whether the investment is classified as held-to-maturity or available-for-sale. d. Two of the three answers included in a-c are true.

Roger is legally blind. His vision impairment is a complication of diabetes mellitus. Can you describe what structural changes in Roger’s eyes have caused his blindness? As you were helping him cross the street, a fellow pedestrian suddenly stumbled into your path. Without any signal from you, Roger jumped back to avoid hitting the other person. If Roger is blind, how could he have reacted this way?

Roger is legally blind. His vision impairment is a complication of diabetes mellitus. Can you discuss what structural changes in Roger’s eyes have caused his blindness? As you were helping him cross the street, a fellow pedestrian suddenly stumbled into your path. Without any signal from you, Roger jumped back to avoid hitting the other person. If Roger is blind, how could he have responded this way?

A head-to-toe skin assessment is done per institutional policy each shift or on a daily basis. At the most recent assessment of Mrs. Stein's skin, blistering was noted over the sacral area; on direct examination it was a small area of denuded tissue with redness around the blistered area. The area was found to have minimal depth and a red, moist base. How would you describe the impairment in skin integrity in your charting?

Match the following terms with the definitions.

$$\begin{array}{llll} \text { anuria } & \text { fistula } & \text { nephrotic syndrome } & \text { pyuria } \\ \text { azotemia } & \text { hesitancy } & \text { neurogenic bladder } & \text { pyelonephritis } \\ \text { cystocele } & \text { hydronephrosis } & \text { nocturia } & \text { urgency } \\ \text { dysuria } & \text { hypercalcemia } & \text { oliguria } & \text { urolithiasis } \\ \text { enuresis } & \text { nephrolithiasis } & \text { polycystic } & \text { Wilms tumor } \end{array}$$

impairment of bladder control due to brain or nerve conduction _________.

As a new intern for the local branch office of a national brokerage firm, you are excited to get an assignment that allows you to use your accounting expertise. Your supervisor provides you with the spreadsheet below, which contains data for the most recent quarter for three companies that the firm has been recommending to its clients as “buys.” Each of the companies’ returns on assets has outperformed their industry cohorts in the past. But, given recent challenges in their markets, there is concern that the companies may experience operating challenges and lower earnings. (All numbers in millions, except return on assets.)

Instructions

• a. The fair value for each of these companies is lower than the corresponding book value. What implications does this have for each company’s future prospects?
• b. To date, none of these companies has recorded goodwill impairments. Your supervisor suspects that they will need to record impairments in the near future, but he is unsure about the goodwill impairment rules. Is it likely that these companies will recognize impairments? Explain.
• c. Estimate the amount of goodwill impairment for each company and prepare the journal entry to record the impairment. For each company, you may assume that the book value less the carrying value of the goodwill approximates the fair value of the company’s net assets.
• d. Discuss the effects of your entries in part (c) on your evaluation of these companies based on the return on assets ratio.

Plasher Company has a reporting unit resulting from an earlier business combination. The reporting unit's current assets and liabilities are

$$\begin{array}{lrr} & \textbf{Carrying Amount} & \textbf{Fair Value}\\ \\ \text{Cash} & \$\hspace{7pt}30,000 & \$\hspace{7pt}30,000\\ \text{Inventory} & 70,000 & 100,000 \\ \text{Land} & 30,000 & 60,000 \\ \text{Buildings} & 210,000 & 230,000 \\ \text{Equipment} & 160,000 & 170,000 \\ \text{Goodwill} & 150,000 \\ \text{Notes Payable} & 100,000 & 100,000 \\ \end{array}$$

Required

Determine the amount of goodwill to be reported and the amount of goodwill impairment, if any, if the total fair value of the reporting unit is estimated to be $580,000.

Write the letter for any or all of the following definitions of abnormality in the blanks: (a) societal norm violation, (b) impairment in functioning, (c) dysfunction, and (d) distress. Three weeks ago, Jane, a 35-year-old business executive, stopped showering, refused to leave her apartment, and started watching television talk shows. Threats of being fired have failed to bring Jane back to reality, and she continues to spend her days staring blankly at the television screen. Which of the definitions seems to describe Jane's behavior? ____________

Choose the corresponding cause or description of Klinefelter syndrome.

a. a disorder caused by trisomy 21

b. a disorder caused by a recessive gene that fails to produce the enzyme phenylalanine hydroxylase

c. a disorder caused by the trisomy condition XXY

d. a condition caused by a recessive gene that causes an impairment in chloride ion transport across the cell membrane

e. a sex-linked trait that inhibits the production of certain photopigments

f. a disorder caused by the monosomy condition XO