There are two Journal Entries 1) Prepare journal entries for Wember to record the impairment of its intangible assets at December 31, 20192) Prepare journal entries for Wember to record the amortization expense for its intangibles at December 31, 2020 InstructionsWember Company acquired a subsidiary company on December 31, 2015, and recorded the cost of the intangible assets it acquired as follows:PatentTrade nameGoodwill$100,00080,000150,000The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade namewas considered to have an indefinite life.Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2019, because of a currentrecession and technological changes in the subsidiary's industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31,2019. Instructionswas considered to have an indefinite life.Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2019, because of a currentrecession and technological changes in the subsidiary's industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31,2019.Wember estimates that the fair value of the patent is $42,000. The company estimates the fair value of the trade name to be $90,000 but decides that it now has a limited life of 5 years.The subsidiary company, which qualifies as a reporting unit, has a book value of $700,000, including the goodwill of $150,000. Wember estimates that the fair value of the subsidiarycompany is $650,000, of which it allocates 80% to the identifiable assets and liabilities.Required:1. Prepare journal entries for Wember to record the impairment of its intangible assets at December 31, 2019.2. Prepare journal entries for Wember to record the amortization expense for its intangibles at December 31, 2020.

The process of recording business transactions in the books of accounts for the first time is…

Wember Company acquired a subsidiary company on December 31, 2015, and recorded the cost of the intangible assets it acquired as follows: Patent Trade name Goodwill $100,000 80,000 150,000 The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade name was considered to have an indefinite life. Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2019, because of a current recession and technological changes in the subsidiary's industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31, 2019.

Wember Company acquired a subsidiary company on December 31, 2015, and recorded the cost of the intangible assets it acquired as follows: Patent Trade name Goodwill $100,000 80,000 150,000 The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade name was considered to have an indefinite life. Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2019, because of a current recession and technological changes in the subsidiary's industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31, 2019.

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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