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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. Determine if the licence is impaired at the end of 2023. The licence select an option is impaired is not impaired at the end of 2023.

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. Determine if the licence is impaired at the end of 2023. The licence select an option is impaired is not impaired at the end of 2023.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Determine if the licence is impaired at the end of 2023. The licence select an option is impaired is not 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 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation enter an acc enter an account title Debit enter a debit amount enter an account title enter a debit amount The licence select an option is impaired is not impaired at the end of 2024. enter an account title 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. Credit 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 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit enter a debit amount enter a credit amount enter a debit amount enter a credit amount Credit enter a credit amount enter a credit amount
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. Determine if the licence is impaired at the end of 2023. The licence select an option is impaired is not 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 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation enter an acc enter an account title Debit enter a debit amount enter an account title enter a debit amount The licence select an option is impaired is not impaired at the end of 2024. enter an account title 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. Credit 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 0 for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit enter a debit amount enter a credit amount enter a debit amount enter a credit amount Credit enter a credit amount enter a credit amount
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