Accounting, Analysis, and Principles Date Account Titles and Explanation Debit C
ID: 2594042 • Letter: A
Question
Accounting, Analysis, and Principles
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
(To record amortization expense)
Dec. 31
(To record loss on impairment)
Open Show Work
SAVE FOR LATER
SUBMIT ANSWER
Accounting, Analysis, and Principles
Your answer is partially correct. Try again. On January 2, 2017, Sheffield Corp. reported the following intangible assets: (1) copyright with a carrying value of $19,500, and (2) a trade name with a carrying value of $8,100. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 10 years.At December 31, 2017, Sheffield assessed the intangible assets for possible impairment and developed the following information.
Estimated
Undiscounted Expected
Future Cash Flows Estimated Fair Value Copyright $25,100 $20,800 Trade name 9,600 5,300
Prepare any journal entries required for Sheffield’s intangible assets at December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31
(To record amortization expense)
Dec. 31
(To record loss on impairment)
Click if you would like to Show Work for this question:Open Show Work
Question Attempts: 1 of 15 usedSAVE FOR LATER
SUBMIT ANSWER
Explanation / Answer
Amortisation expense on Copyright = 19500/10 = 1950
Amortisation expense on Trade name = 8100/5 = 1620
Total amortisation expense = 1950 + 1620 = 3570
Book Value of Copyright = 19500 - 1950 = 17550
Fair Value of copyright = 20880
Impairment loss = 0 (because fair value exceeds book value)
Book Value of Trade name = 8100 - 1620 = 6480
Fair Value of Trade name = 5300
Impairment loss = 6480 - 5300 = 1180
Journal:
To record amortisation expense:
Amortisation Expense Dr 3570
Accumulated Amortisation Cr 3570
To record loss on impairment:
Impairment Loss Dr 1180
Trade name Cr 1180