Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. part a: a patent was purchased on ten first day of

Part A: A patent was purchased on ten first day of the fiscal year for...

60.1K

Verified Solution

Question

Accounting

Part A:

A patent was purchased on ten first day of the fiscal year for $900,000. Its useful life is 5 years with no residual value. At the end of year 3, an unfavorable event occurred indicating that the asset may be impaired. The patents fair value is $280,000, and the sum of undiscounted future net cash flows is $325,000.

Calculate the patents impairment loss and make necessary adjustment entry, and the entry for the year 4 amortization. Show your calculations.

Part B:

A company has a trademark with carrying value of $750,000 and an indefinite life. At the end of year 4, an even occurred indicating that the asset may be impaired. The trademarks fair value is $700,000, and its undiscounted future cash flows are $790,000. The company decided to bypass qualitative assessment and directly perform the quantitative test.

a. Record the entry for the impairment loss on trademark, if any.

b. At what value the asset would be reported in the balance sheet at the end of year 4?

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

Basic Math
1.2K views

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer...

Biology
1.2K views

Which evolutionary process would you argue is currently causing the largest impact on the evolution of...

Finance
1.2K views

a. A bond that has ​$1 comma 000 par value​ (face value) and a contract or...

Biology
1.2K views

Which muscle is highlighted Opsoas major O pectineus Oiliacus copyright by somso 2010 www

Basic Math
1.2K views

Let p, q and r represent the following simple statements:p: I get an A.q: The...

Statistics
1.2K views

Quality control A population of 584 semiconductor wafers contains wafers from three lots The wafers...

Calculus
1.2K views

a Verify that the function y x C 28 is a solution of the differential...

Accounting
1.2K views

Decision trees and rule generator tools can be used to plan and anticipate criminal activity....

Accounting
1.2K views

1 Sold inventory on account to Patina: Inventory Item Sales Price per item Quantity Sold...

Accounting
1.2K views

The Fulmar Division of Vaughn Manufacturing had an ROI of 25% when sales were $2800000...

Accounting
1.2K views

What is listed property? Give 2 Examples( in the business taxation)

Finance
1.2K views

Dickson Co. is considering a project that has the following cash flow and WACC data....