Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. at the beginning of year 1, sports gear inc. (sgi)

At the beginning of Year 1, Sports Gear Inc. (SGI) acquired a college apparel license...

60.1K

Verified Solution

Question

Accounting

At the beginning of Year 1, Sports Gear Inc. (SGI) acquired a college apparel license at a cost of $28,000,000, excluding legal fees of $1,600,000 and registration fees of $400,000. The company estimated that the license would have a useful (legal) life of 15 years. For Question 3, assume that the fair value of the license at the end of Year 1, Year 2, and Year 3 is $26,600,000, $26,300,000, and $23,850,000, respectively. Answer the questions below and enter the correct dollar amounts in the associated cells. Round to the nearest dollar.

1. What amount will the company report as the carrying value of the license asset at the end of Year 2 under U.S. GAAP?

2. If the company determines that the license asset is impaired by 3,000,000 at the beginning of Year 3, what is the total amount of of expense related to the license reported on the income statement for Year 3 under U.S. GAAP?

3. Determine the amount of revaluation gain or loss that is reported on the income statement for Year 2 under IFRS if the revaluation model is used.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students