Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1,2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent whenit was purchased. In 2019, the CEO of Orlando Packaging noted a decrease, industry-wide, in thedemand for folded boxes. As a result, an impairment analysis was done as of June 30, 2019. TheCEO estimated that the patent had a remaining useful life of 5 years. Expected annual cash flowsover the next 5 years were estimated at $20,000. The discount rate used by Orlando Packaging is5%. The present value of the cash flows is $14,4631. Was the Orlando Packaging Company patent impaired at June 30, 2019? If so, what was theamount of the impairment loss?A) No; $0B) Yes; $14,463C) Yes; $17,410OD) Yes; $4,000 Ortiz Box Company purchased a patent on a box - folding machine for $160,000 on July 1, 2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent when it was purchased. In early 2019, theCEO of Ortiz noted a decrease, industry - wide, in the demand for folded boxes. The CEO estimated that the patent had a remaining useful life of 5 years. An impairment analysis was done as of June 30, 2019. Expected annualcash flows over the next 5 years were estimated at $20,000. The discount rate used by Ortiz is 5%. How much amortization expense was recognized by Ortiz in 2019 and 2020, respectively? Select one: a. $4,211 b. $7,330 c. $7,818 d. $12,870 e. $12, 659

Name: Orlando Packaging Company purchased a patent on a box-folding machine
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Description: Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1,2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent whenit was purchased. In 2019, the CEO of Orlando Packaging not

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Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1, 2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent when it was purchased. In 2019, the CEO of Orlando Packaging noted a decrease, industry-wide, in the demand for folded boxes. As a result, an impairment analysis was done as of June 30, 2019. The CEO estimated that the patent had a remaining useful life of 5 years. Expected annual cash flows over the next 5 years were estimated at $20,000. The discount rate used by Orlando Packaging is 5%. The present value of the cash flows is $14,463 1. Was the Orlando Packaging Company patent impaired at June 30, 2019? If so, what was the amount of the impairment loss? O A) No; $0 OB) Yes; $14,463 OC) Yes; $17,410

Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1, 2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent when it was purchased. In 2019, the CEO of Orlando Packaging noted a decrease, industry-wide, in the demand for folded boxes. As a result, an impairment analysis was done as of June 30, 2019. The CEO estimated that the patent had a remaining useful life of 5 years. Expected annual cash flows over the next 5 years were estimated at $20,000. The discount rate used by Orlando Packaging is 5%. The present value of the cash flows is $14,463 1. Was the Orlando Packaging Company patent impaired at June 30, 2019? If so, what was the amount of the impairment loss? O A) No; $0 OB) Yes; $14,463 OC) Yes; $17,410

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1, 2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent when it was purchased. In 2019, the CEO of Orlando Packaging noted a decrease, industry-wide, in the demand for folded boxes. As a result, an impairment analysis was done as of June 30, 2019. The CEO estimated that the patent had a remaining useful life of 5 years. Expected annual cash flows over the next 5 years were estimated at $20,000. The discount rate used by Orlando Packaging is 5%. The present value of the cash flows is $14,463 1. Was the Orlando Packaging Company patent impaired at June 30, 2019? If so, what was the amount of the impairment loss? O A) No; $0 O B) Yes; $14,463 C) Yes; $17,410 O D) Yes; $4,000
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