Homework Help is Here – Start Your Trial Now!
Business
Accounting
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.

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
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscounted future 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 in perpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that the licence 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 impaired at the end of 2023. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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 Explanation Loss on Impairment Intangible Assets-Licences Debit 57600 Credit 57600
Transcribed Image Text:At the end of 2023, Blue Spruce Corporation owns a licence with a carrying amount of $505,000. Blue Spruce expects undiscounted future 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 in perpetuity and has an indefinite life, and that Blue Spruce prepares financial statements in accordance with ASPE. Assume that the licence 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 impaired at the end of 2023. Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. 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 Explanation Loss on Impairment Intangible Assets-Licences Debit 57600 Credit 57600
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Impairment of Assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS