Question

In: Accounting

Accounting, Analysis, and Principles On January 2, 2017, Culver Corp. reported the following intangible assets: (1)...

Accounting, Analysis, and Principles

On January 2, 2017, Culver Corp. reported the following intangible assets: (1) copyright with a carrying value of $13,000, and (2) a trade name with a carrying value of $8,800. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 10 years.

At December 31, 2017, Culver assessed the intangible assets for possible impairment and developed the following information.

Estimated Undiscounted Expected Future Cash Flows

Estimated Fair Value
Copyright               $18,000      $14,400
Trade Name      10,300

     5,400

Prepare any journal entries required for Culver's intangible asses at December 31, 2017.

Answer Set up:

Date Account Titles and Explanation Debit

Credit

Dec. 31

(To record amortization expense)

Dec. 31

(To record loss on impairment)

Solutions

Expert Solution

Carrying value Life
Copyright $13,000 10 years
Trade name $8,800 5 years
Amortization expense = Carrying value / remainng useful life
Copyright = $ 13000 / 10
= $ 1300
Trademark = $ 8800 / 5
= $ 1760
1 Amortization expense Dr 3060
To Copyright A/c 1300
To Tradename A/c 1760
Income Statement Dr 3060
To amortization expense 3060
There will be no impairment in case of Copyright as estimated fair value is more than carrying value.
Impairment in case of tradename = (Carrying value - amortization) - Estimated fair value
= (8800 - 1760) - 5400
1640
2 Impairment loss Dr 1640
To Tradename A/c 1640
Income Statement Dr 1640
To impairment loss 1640

ekkarill92 answered 3 years ago
Next > < Previous

Related Solutions

Information concerning Monty Corporation’s intangible assets is as follows. 1. On January 1, 2017, Monty signed...
Information concerning Monty Corporation’s intangible assets is as follows. 1. On January 1, 2017, Monty signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $60,000. Of this amount, $12,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $12,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required of the...
Information concerning Marigold Corporation’s intangible assets is as follows. 1. On January 1, 2017, Marigold signed...
Information concerning Marigold Corporation’s intangible assets is as follows. 1. On January 1, 2017, Marigold signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $80,000. Of this amount, $16,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $16,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required of the...
Information concerning Marigold Corporation’s intangible assets is as follows. 1. On January 1, 2017, Marigold signed...
Information concerning Marigold Corporation’s intangible assets is as follows. 1. On January 1, 2017, Marigold signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $80,000. Of this amount, $16,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $16,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required of the...
Problem 12-3 Information concerning Monty Corporation’s intangible assets is as follows. 1. On January 1, 2017,...
Problem 12-3 Information concerning Monty Corporation’s intangible assets is as follows. 1. On January 1, 2017, Monty signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $60,000. Of this amount, $12,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $12,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required...
Springer Company had three intangible assets at the end of 2017 (end of the accounting year):...
Springer Company had three intangible assets at the end of 2017 (end of the accounting year): a. A copyright purchased on January 1, 2017, for a cash cost of $14,600. The copyright is expected to have a 10-year useful life to Springer. b. Goodwill of $66,000 from the purchase of the Hartford Company on July 1, 2016. c. A patent purchased on January 1, 2016, for $34,000. The inventor had registered the patent with the U.S. Patent Office on January...
1.)What are the types of intangible assets? 2.) How are intangible assets used? 3.) What are...
1.)What are the types of intangible assets? 2.) How are intangible assets used? 3.) What are the various types of intangible asset valuations? 4.) What qualifications are required in order to become a valuation analyst? Also, how is the job market for it? Are there any job openings for it? And what is the salary? Anything else?
Bramble Corp. reported the following information for 2017. Bramble Corp. Comparative Balance Sheets December 31 Assets...
Bramble Corp. reported the following information for 2017. Bramble Corp. Comparative Balance Sheets December 31 Assets 2017 2016 Change Increase/Decrease Cash $51,510 $36,090 $15,420 Increase Accounts receivable 61,380 21,880 39,500 Increase Inventory 44,120 –0– 44,120 Increase Prepaid expenses 5,950 3,970 1,980 Increase Land 55,190 69,510 14,320 Decrease Buildings 198,490 198,490 –0– Accumulated depreciation—buildings (20,790 ) (13,860 ) 6,930 Increase Equipment 182,860 68,310 114,550 Increase Accumulated depreciation—equipment (27,700 ) (10,080 ) 17,620 Increase Totals $551,010 $374,310 Liabilities and Stockholders’ Equity Accounts...
Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible...
Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible assets of the firm. Please also include references
Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible...
Accounting for intangible assets. Discuss relevance versus reliability as they apply to reporting on the intangible assets of the firm.
At January 1, 2017, Culver Company’s outstanding shares included the following. 276,000 shares of $50 par...
At January 1, 2017, Culver Company’s outstanding shares included the following. 276,000 shares of $50 par value, 7% cumulative preferred stock 825,000 shares of $1 par value common stock Net income for 2017 was $2,479,000. No cash dividends were declared or paid during 2017. On February 15, 2018, however, all preferred dividends in arrears were paid, together with a 5% stock dividend on common shares. There were no dividends in arrears prior to 2017. On April 1, 2017, 481,000 shares...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT