At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscountedfuture cash flows from this licence to total $509,100. The licence's fair value is $400,100 and disposal costs are estimated to be nil.The licence's discounted cash flows (that is, value in use) are estimated to be $447,400. Assume that the licence was granted inperpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that thelicence was granted in perpetuity and has an indefinite life.Your answer is partially correct.Determine if the licence is impaired at the end of 2023.The licence is impairedat the end of 2023.Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)Account Titles and ExplanationLoss on ImpairmentIntangible Assets-LicencesDebit57600Credit57600

Impairment losses are recognized when the assets carrying value is higher than the recoverable…

Answered: owns a licence with a carrying amount…

owns a licence with a carrying amount of $5 509,100. The licence's fair value is $400,100 alue in use) are estimated to be $447,400. A Blue Spruce prepares financial statements in indefinite life.

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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