For consolidation eliminating entry (O), what amount will be reported as expense for identifiable intangibles amortization and impairment?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following previously unreported intangible assets were acquired by a U.S. company in a business combination. Their
beginning-of-current-year book values and allocation to reporting units are listed below.
Reporting Unit #1Reporting Unit #2
$8,000
Trade names
Distribution network
Goodwill
40,000
Trade names
$6,400
32,000
Both identifiable intangibles have a 5-year remaining life. Information for year-end impairment testing is as follows:
Sum of Expected
Sum of Expected
Future Discounted
Future Undiscounted
Cash Flows
Cash Flows
$7,200
4,800
$6,000
Distribution network
4,000
Information for year-end goodwill impairment testing is as follows:
Fair value
Book value before year-end adjustments for identifiable
intangible amortization and impairment charges
Reporting Unit #1Reporting Unit #2
$27,200
$20,800
28,000
24,000
For consolidation eliminating entry (O), what amount will be reported as expense for identifiable intangibles amortization
and impairment?
a. $2,880
b. $4,000
c. $4,400
d. $5,280
Transcribed Image Text:The following previously unreported intangible assets were acquired by a U.S. company in a business combination. Their beginning-of-current-year book values and allocation to reporting units are listed below. Reporting Unit #1Reporting Unit #2 $8,000 Trade names Distribution network Goodwill 40,000 Trade names $6,400 32,000 Both identifiable intangibles have a 5-year remaining life. Information for year-end impairment testing is as follows: Sum of Expected Sum of Expected Future Discounted Future Undiscounted Cash Flows Cash Flows $7,200 4,800 $6,000 Distribution network 4,000 Information for year-end goodwill impairment testing is as follows: Fair value Book value before year-end adjustments for identifiable intangible amortization and impairment charges Reporting Unit #1Reporting Unit #2 $27,200 $20,800 28,000 24,000 For consolidation eliminating entry (O), what amount will be reported as expense for identifiable intangibles amortization and impairment? a. $2,880 b. $4,000 c. $4,400 d. $5,280
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