Question: At the end of 2018, McGill is evaluating the results of the instructional business. Due to fierce competition from online and television, the S&S Golf reporting unit has been losing money. Its book value is now $500,000. The fair value of the S&S Golf reporting unit is $420,000. The implied value of goodwill is $90,000. McGill collected the following information related to the company's intangible assets.
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Intangible Asset
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Expected Cash Flows (undiscounted)
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Fair Values
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Trade Names
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$ 9,000
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$ 3,000
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Copyrights
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$30,000
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$ 25,000
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a. Prepare the journal entries (T-account format) required, if any, to record impairments on M&M's intangible assets. Assume that any amortization for 2018 has already been recorded.