The following amounts have been determined

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At the beginning of 2011, Metatec Inc. acquired Ellison Technology Corporation for $600 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired:

Plant and equipment (depreciable assets) ....... $150 million
Patent ..................... 40 million
Goodwill ..................... 100 million
The plant and equipment are depreciated over a 10 year useful life on a straight line basis. There is no estimated residual value. The patent is estimated to have a 5 year useful life, no residual value, and is amortized using the straight line method.
At the end of 2013, a change in business climate indicated to management that the assets of Ellison might be impaired. The following amounts have been determined:

Plant and equipment:
Undiscounted sum of future cash flows .......... $ 80 million
Fair value ...................... 60 million
Patent:
Undiscounted sum of future cash flows .......... $ 20 million
Fair value ...................... 13 million
Goodwill:Fair value of Ellison Technology ............. $450 million
Fair value of Ellison's net assets (excluding goodwill) ....... 390 million
Book value of Ellison's net assets (including goodwill) ..... 470 million
After first recording any impairment losses on plant and equipment and the patent.

Required:
1. Compute the book value of the plant and equipment and patent at the end of 2013.
2. When should the plant and equipment and the patent be tested for impairment?
3. When should goodwill be tested for impairment?
4. Determine the amount of any impairment loss to be recorded, if any, for the three assets.

Reference no: EM13881683

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The following amounts have been determined : At the beginning of 2011, Metatec Inc. acquired Ellison Technology Corporation for $600 million. In addition to cash, receivables, and inventory, the following assets and their fair values were also acquired:
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