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12-6 - 126(a 1) 2),purchasepriceis20,000,$500.,0...

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12-6(a) 1) Trade name has an indefinite life-therefore it cannot be amortized. 2)Copyright has a life of 40 years, purchase price is 20,000, therefore amortization per year is $500. however as it was purc 3)Purchase price for OldMaster is $750,000. However FairValue is $800,000->further computation needs to be done to com 1)Purchase price  750,000 2)Fair Value of net Assets {note 1} 600,000 {note 1} Fair value of Assets =  800,000 Less: Fair Value of Liabilities 200,000 Fair value of Net assets* $600,000  3) Good will 150,000 Purchase price 750,000 Less:Fair Value of net assets 600,000 Goodwill 150,000 Balance Sheet - Intangible Assets Tradename  10,000.00  Copyright - After Amortizion  250.00  $20,000-($20,000/40year)*1/2year Goodwill  150,000.00  Total Intangible Assets  160,250.00  12-6b 31-Dec-07 Copyright Amortization Expense 500  Copyright (or Accumulated Copyright Amortization) 500 (to record amortization of copyright) Balance Sheet - Intangible assets 31-Dec-07 Tradename  10,000.00 
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