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Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,600 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated undiscounted future cash flows from the trade name are $64,000 on January 4, 2018. On January 4, 2018, what should be recognized as the impairment loss? A) $6,800 B) $10,800 C) $11,150 D) $19,800 E) No impairment loss

Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,600 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated undiscounted future cash flows from the trade name are $64,000 on January 4, 2018. On January 4, 2018, what should be recognized as the impairment loss? A) $6,800 B) $10,800 C) $11,150 D) $19,800 E) No impairment loss

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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Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,600 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated undiscounted future cash flows from the trade name are $64,000 on January 4, 2018. On January 4, 2018, what should be recognized as the impairment loss? A) $6,800 B) $10,800 C) $11,150 D) $19,800 E) No impairment loss

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