5. Barkley Corp. obtained a tradename in January 2024, incurring legal costs of $72,000. The company amortizes the tradename over 8 years using the straight-line method. Barkley successfully defended its tradename in January 2025, incurring $19,600 in legal fees. At the beginning of 2026, based on new marketing research, Barkley determines that the fair value of the tradename is $60,000. Estimated future net cash flows from the tradename are $64,000 on January 4, 2026.
5. Barkley Corp. obtained a tradename in January 2024, incurring legal costs of $72,000. The company amortizes the tradename over 8 years using the straight-line method. Barkley successfully defended its tradename in January 2025, incurring $19,600 in legal fees. At the beginning of 2026, based on new marketing research, Barkley determines that the fair value of the tradename is $60,000. Estimated future net cash flows from the tradename are $64,000 on January 4, 2026.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 7MC
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Transcribed Image Text:5. Barkley Corp. obtained a tradename in January 2024, incurring legal costs of $72,000. The company
amortizes the tradename over 8 years using the straight-line method. Barkley successfully defended
its tradename in January 2025, incurring $19,600 in legal fees. At the beginning of 2026, based on new
marketing research, Barkley determines that the fair value of the tradename is $60,000. Estimated
future net cash flows from the tradename are $64,000 on January 4, 2026.
Instructions
Prepare the necessary journal entries for the years ending December 31, 2024, 2025, and 2026. Show
all computations.
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