WK 4 LT P12-3 and E 11 18 upload

WK 4 LT P12-3 and E 11 18 upload - 5,870 Franchise...

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Chapter 12 P12-3 (LO 2,3) A) Dec 31, 2001 Franchise Net of accumulated amorization of $5,870 (Schedule 1) $52,830 Patent Net of accumulated amortiation of $1700 (Schedule 2) 11,900 Trademark, net of accumulated amortization of $5,840 (Schedule 3) 34,320 Total intangible assets 99,050 Schedule 1 Franchise on Jan 1 Cost of Franchise $75,000 2007 amortization ($75,000 x 1/10) -7,500 Cost of franchise, net of amortization $67,500 Schedule 2 Patent Cost of securing patent $13,600 2007 amortization ($13,600 x 1/8) -1,700 Cost of patent, net of amortization $11,900 Schedule 3 Trademark Cost of trademark 32,000 Cost of legal defense 8,160 Cost of trademark 40,160 Franchise net accumlated amortization (7,500) Schedule 1 67,500 Patent, net of accumlation amortization (1,700) Schedule 2 11,900 Trademark (Schedule 3) 40,160 Total intangible assets 119,560 B) Schedule of expense resulting from intagible assets transaction for YE Interest expense: (43,700 x 14%) 6,118 franchise amortization (schedule 1)
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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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WK 4 LT P12-3 and E 11 18 upload - 5,870 Franchise...

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