At the end of 2021, Magilke is evaluating the results of the instructional business. Due to fierce competition from online and television (e.g., the Golf Channel), the Old Master reporting unit has been losing money. Its book value (excluding the Tradenames and Copyrights) is now $500,000. The fair value of the Old Master reporting unit is $420,000. Magilke has collected the following information related to the company’s intangible assets. Intangible Asset Expected Cash Flows (undiscounted) Fair Values Trade names $16,800 $5,600 Copyrights 56,000 51,000 Prepare the journal entries required, if any, to record impairments on Kingbird intangible assets. (Assume that any amortization for 2021 has been recorded.)
At the end of 2021, Magilke is evaluating the results of the instructional business. Due to fierce competition from online and television (e.g., the Golf Channel), the Old Master reporting unit has been losing money. Its book value (excluding the Tradenames and Copyrights) is now $500,000. The fair value of the Old Master reporting unit is $420,000. Magilke has collected the following information related to the company’s intangible assets. Intangible Asset Expected Cash Flows (undiscounted) Fair Values Trade names $16,800 $5,600 Copyrights 56,000 51,000 Prepare the journal entries required, if any, to record impairments on Kingbird intangible assets. (Assume that any amortization for 2021 has been recorded.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
At the end of 2021, Magilke is evaluating the results of the instructional business. Due to fierce competition from online and television (e.g., the Golf Channel), the Old Master reporting unit has been losing money. Its book value (excluding the Tradenames and Copyrights) is now $500,000. The fair value of the Old Master reporting unit is $420,000. Magilke has collected the following information related to the company’s intangible assets.
|
Intangible Asset
|
Expected
(undiscounted) |
Fair Values
|
||
|---|---|---|---|---|
|
Trade names
|
$16,800 | $5,600 | ||
|
Copyrights
|
56,000 | 51,000 |
Prepare the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education