Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost these assets using the straight-line method over the following average estimated useful lives (in years), as reported in their annual reports. Type of Intangible Asset Developed Technology Trade Names Customer Relationships Danube Toggle ConnectOn 4.0 8.0 2.5 2.5 2.3 4.8 6.4 1.4 3.3 Assume each company spent $820,000 at the beginning of the current year for additional Developed Technology. Because of its proprietary nature, the technology is estimated to have no residual value at the end of its estimated life. Required: Calculate the impact (direction and amount) that the amortization of such expenditures would have on each company's Income from Operations in the current year. (Decreases should be indicated by a minus sign. Do not round intermediate calculations.)
Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost these assets using the straight-line method over the following average estimated useful lives (in years), as reported in their annual reports. Type of Intangible Asset Developed Technology Trade Names Customer Relationships Danube Toggle ConnectOn 4.0 8.0 2.5 2.5 2.3 4.8 6.4 1.4 3.3 Assume each company spent $820,000 at the beginning of the current year for additional Developed Technology. Because of its proprietary nature, the technology is estimated to have no residual value at the end of its estimated life. Required: Calculate the impact (direction and amount) that the amortization of such expenditures would have on each company's Income from Operations in the current year. (Decreases should be indicated by a minus sign. Do not round intermediate calculations.)
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section19.6: Buying Intangible Assets And Calculating Amortization Expense
Problem 1OYO
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