At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscounted future cash flows from this licence to total $509,100. The licence's fair value is $400,100 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $447,400. Assume that the licence was granted in perpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that the licence was granted in perpetuity and has an indefinite life. Your answer is partially correct. Determine if the licence is impaired at the end of 2023. The licence is impaired at the end of 2023. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Loss on Impairment Intangible Assets-Licences eTextbook and Media List of Accounts Your answer is partially correct. Debit 57600 Credit 57600 Assume the recoverable amount is calculated to be $420,200 at the end of 2024. Determine if the licence is impaired at the end of 2024. The licence is not impaired at the end of 2024. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Loss on Impairment Recovery of Loss from Impairment Debit 84800 Credit 84800
At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscounted future cash flows from this licence to total $509,100. The licence's fair value is $400,100 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $447,400. Assume that the licence was granted in perpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that the licence was granted in perpetuity and has an indefinite life. Your answer is partially correct. Determine if the licence is impaired at the end of 2023. The licence is impaired at the end of 2023. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Loss on Impairment Intangible Assets-Licences eTextbook and Media List of Accounts Your answer is partially correct. Debit 57600 Credit 57600 Assume the recoverable amount is calculated to be $420,200 at the end of 2024. Determine if the licence is impaired at the end of 2024. The licence is not impaired at the end of 2024. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Loss on Impairment Recovery of Loss from Impairment Debit 84800 Credit 84800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscounted
future cash flows from this licence to total $509,100. The licence's fair value is $400,100 and disposal costs are estimated to be nil.
The licence's discounted cash flows (that is, value in use) are estimated to be $447,400. Assume that the licence was granted in
perpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that the
licence was granted in perpetuity and has an indefinite life.
Your answer is partially correct.
Determine if the licence is impaired at the end of 2023.
The licence is impaired
at the end of 2023.
Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)
Account Titles and Explanation
Loss on Impairment
Intangible Assets-Licences
eTextbook and Media
List of Accounts
Your answer is partially correct.
Debit
57600
Credit
57600
Assume the recoverable amount is calculated to be $420,200 at the end of 2024. Determine if the licence is impaired at the end of
2024.
The licence is not impaired
at the end of 2024.
Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)
Account Titles and Explanation
Loss on Impairment
Recovery of Loss from Impairment
Debit
84800
Credit
84800
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