On 1 January 2012, Bad Ltd acquired all the assets and liabilit ies of Wolf Ltd. Wolf Ltd has several operating divisions, including one whose major industry is the manufacture of toy trains,...

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Extracted text: On 1 January 2012, Bad Ltd acquired all the assets and liabilit ies of Wolf Ltd. Wolf Ltd has several operating divisions, including one whose major industry is the manufacture of toy trains, particularly those of historical significance. The toy trains division is regarded as a CGU. In paying $2 million for the net assets of Wolf Ltd, Bad Ltd calculated that it had acquired goodwill of $240 000. The goodwill was allocated to each of the divisions, and the as acquired sets and liabilities measured at fair value at acquisition date. At 31 December 2014, the carrying amounts of the assets of th e toy train division were: Factory Inventory Brand – 'Froggy' $50 000 $250 000 $150 000 Goodwill $50 000 Total 500 000 There is a declining interest in toy trains because of the aggres sive marketing of computer-based toys, so the management of Bad Ltd measured the value in use of the toy train division at 31 December 2014, determining it to be $423 000. Required: Prepare the journal entries to account for the impairment loss at 31 December 2014.