P12-6 - Copyright 23,100 Goodwill 170,000 Total Intangibles...

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Sheet1 Page 1 A) December 31, 2009 Intangible portion of Balance sheet Trade Name 10,000 Copyright 23,700 Goodwill 170,000 Total Intangibles 203,700 Valuation of Copyright 24,000/40 = 600/.5 = 300 24,000-300 = 23,700 Valuation of Goodwill 800,000-200,000 = 600,000 770,000-600,000 = 170,000 The trade name can be renewed indefinitely and the goodwill is indefinite. The only amortization is the $300 from the copyright. B) Copyright amortization expense 600 Accumulated copyright amortization 600 December 31, 2010 Intangible portion of Balance sheet Trade Name 10,000
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Unformatted text preview: Copyright 23,100 Goodwill 170,000 Total Intangibles 203,100 Valuation of Copyright 24,000/40 = 600/1.5 = 900 24,000-900 = 23,100 C) Loss on Impairment 87,000 Goodwill (170,000-(420,000-330,000)) 80,000 Trade Name (10,000-3,000) 7,000 The reason Goodwill is considered impaired is because the value of the business was only $420,000 with a carrying value of $500,000. Copyright is not impaired because the expected future cash flow is $30,000 and that exceeds the current carrying amount of $24,000. Sheet1 Page 2...
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P12-6 - Copyright 23,100 Goodwill 170,000 Total Intangibles...

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