Mikkeli OY acquired a brand name with an indefinite life in 2020 for 40,000 markkas. At December 31, 2020, the brand name could be sold for 35,000 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 42,000 markkas, and the present value of this amount is 34,000 markkas. Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP. What entry(ies), if any, would be made at 12/31/21, assuming that the Brand has suffered no further impairment in 2021. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Ceneral Invonal < Prev 7 of 10 nahit E ELE Next >

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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Transcribed Image Text:Mikkeli OY acquired a brand name with an indefinite life in 2020 for 40,000 markkas. At December 31, 2020, the brand name could be sold for 35,000 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 42,000 markkas, and the present value of this amount is 34,000 markkas. Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: a. Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP. What entry(ies), if any, would be made at 12/31/21, assuming that the Brand has suffered no further impairment in 2021. X Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) General launal < Prev www 7 of 10 www Next >

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