Exercise 12-13 Account Titles and Explanation Debit Credit Account Titles and Ex

Question

Exercise 12-13

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

Presented below is information related to copyrights owned by Mare Company at December 31, 2017.
Cost $8,600,000 Carrying amount 4,300,000 Expected future net cash flows 4,000,000 Fair value 3,200,000
Assume that Mare Company will continue to use this copyright in the future. As of December 31, 2017, the copyright is estimated to have a remaining useful life of 10 years.

Explanation / Answer

1) Recoverable value on December 31, 2017 will be equal to fair value (i.e. $3,200,000).

Loss on Impairment = Carrying Amount - Fair Value

= $4,300,000 - $3,200,000 = $1,100,000

Journal Entry (Amounts in $)

2) Amortization Expense for 2018 = New Carrying Amount/Useful Life

= $3,200,000/10 yrs = $320,000

Journal Entry (Amounts in $)

3)   Journal Entry (Amounts in $)

Account Titles and Explanation Debit Credit Loss on Impairment 1,100,000 Copyrights 1,100,000

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.