Please help! Will Rate!!! Cost $6,000,000 Carrying amount 5,200,000 Expected fut
ID: 2596636 • Letter: P
Question
Please help! Will Rate!!!
Cost $6,000,000
Carrying amount 5,200,000
Expected future net cash flows 4,700,000
Fair value 3,200,000
Assume Wamser will continue to use this asset in the future. As of December 31, 2017, the copyrights have a remaining useful life of 5 years.
Instructions
(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017.
(b) Prepare the journal entry to record amortization expense for 2018.
(c) The fair value of the copyright at December 31, 2018 is $2,500,000. Prepare the journal entry (if any) necessary to record this increase in fair value.
Explanation / Answer
1 Loss on impairment 2000000 =5200000-3200000 Copyrights 2000000 2 Amortization expense 640000 =3200000/5 Copyrights 640000 3 No entry required