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Unformatted text preview: 5,870 Franchise fee (950,000 x 5%) 47,500 patent amortizxation (schedule 2) 1,700 trademark amortization (32,000 x 1/20 x 6/12 + 35,360 x 1/17 x 6/12) 1,840 Total intangible assets 63,028 E11-18 (LO 5) Computation of Impairment of Loss Carrying amount = $500,000 (900,000 - 400,000) Minus: Fair Value-230,000 Loss of impairment $270,000 A) Prepare Journal entry to record impairment at December 31,2007 Loss of Impairment 270,000 Accumulated Depreciation 270,000 B) Where whould the gain or loss on the write down be reported wihtin the coninuing operations as part of the income in the other expense or losses sections c) At December 31 the equipment fair value increased to 260,000. Prepare the journal entry to record this increase in fair value I do not think any entry will be needed d) what accounting issue did management face in accounting for this impairment I see this as management recording a loss for the organization...
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- Spring '11