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Montys Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that provides...

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Accounting

Montys Construction & Paving expanded its business by purchasing Alcott Maintenance, a division that provides road maintenance services. The division was purchased three years ago for $3,346,000 and has been identified as a reporting unit. The net assets for the division including goodwill are as follows:

Cash $271,000
Accounts Receivables 292,000
Inventory 788,000
Property, Plant & Equipment 1,015,000
Goodwill 1,345,000
Accounts Payable (125,000 )
Unearned Revenue (81,000 )
Net assets, at carrying amounts $3,505,000

a) The fair value of the Alcott Maintenance Division reporting unit as a whole is estimated to be $3,717,000. Management determines that the units value in use is $3,807,000.

Prepare any appropriate journal entries for goodwill impairment assuming that Monty Construction & Paving is reporting under ASPE.

b) Prepare any appropriate journal entries for goodwill impairment assuming that Monty Construction & Paving is reporting under IFRS.

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