chapter12excel

chapter12excel - Trademark with 5 years remaining has been...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Trademark with 5 years remaining has been amortized to $200,000. There has been an advancemen competitor's trademark which is deemed an "event or change in circumstance" which may impair our trademark. We have estimated the future cash flows as follows: Total Year 1 Year 2 Year 3 Year 4 Year 5 Undiscounted cash flows 175,000 100,000 50,000 10,000 10,000 5,000 Because the undiscounted cash flows of $175,000 is less than the NBV of $200,000, there has been impairment. We have to estimate the fair value then of our intangible. Most likely we will just DISCOU cash flows. Using a rate of 8%, they are: Total Year 1 Year 2 Year 3 Year 4 Year 5 Discounted cash flows 160,198 96,225 44,549 8,250 7,639 3,536 Therefore our estimated impairment is: Estimated fair value 160,198 Less NBV 200,000 IMPAIRMENT 39,802 ENTRY: Impairment expense 39,802 Intangible asset (or accum amort.) 39,802
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
nt in a an UNT the
Background image of page 2
Reporting Unit Balance Sheet Cash 200,000 Receivables 300,000 Inventory 700,000 PP&E, Net 800,000 Goodwill
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 6

chapter12excel - Trademark with 5 years remaining has been...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online