Giants Co developed a trademark internally, incurring the following costs on 1/1/18: $282,000 $132,000 Research/Development $92,000 Design Registration On 1/1/20, Giants Co acquired a trade name for $498,000. At the time of development (1/1/18) and acquisition (1/1/20), Giants Co estimated that the economic life of each asset would be 12 years. On 1/1/24, Giants Co successfully defended the trade name in a l battle at a cost of $21,700. As a result, the economic life was adjusted to extend through the year 2032. Also on this day, Giants Co has determined that the trademark would have an unlimited capacity to produce cash flows.
Giants Co developed a trademark internally, incurring the following costs on 1/1/18: $282,000 $132,000 Research/Development $92,000 Design Registration On 1/1/20, Giants Co acquired a trade name for $498,000. At the time of development (1/1/18) and acquisition (1/1/20), Giants Co estimated that the economic life of each asset would be 12 years. On 1/1/24, Giants Co successfully defended the trade name in a l battle at a cost of $21,700. As a result, the economic life was adjusted to extend through the year 2032. Also on this day, Giants Co has determined that the trademark would have an unlimited capacity to produce cash flows.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following five independent questions relate to the GIANTS Co, whose reporting year ends on 12/31.
Giants Co developed a trademark internally, incurring the following costs on 1/1/18:
Design
Registration
$282,000
$132,000
$92,000
Research/Development
On 1/1/20, Giants Co acquired a trade name for $498,000. At the time of development (1/1/18) and acquisition (1/1/20), Giants Co estimated that the economic life of each asset would be 12 years. On 1/1/24, Giants Co successfully defended the trade name in a legal
battle at a cost of $21,700. As a result, the economic life was adjusted to extend through the year 2032. Also on this day, Giants Co has determined that the trademark would have an unlimited capacity to produce cash flows.
** REQUIRED:
1) Determine the following:
a) TOTAL amount of amortization expense reported FYE 12/31/23.
b) TOTAL amount of amortization expense reported FYE 12/31/24.
c) carry value of the Trademark at 12/31/24.
d) carry value of the Trade Name at 12/31/24.
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