For each of the following scenarios, select whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of lossthat should be recorded.MachineCopyrightC. Factory buildingd. Buildinga.b.BookValueX Answer is not complete.EstimatedFutureCashFlows15,500 $31,00058,000227,00010,00041,00029,000227,000Fair Value$9,50037,90027,000200,000Is AssetImpaired?YNYNAmount ofLoss Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. GiantBakery Inc. has made an offer to buy Elizabeth Pie Company for $5,000,000. The book value of Elizabeth Pie's recorded assets andliabilities on the date of the offer is $4,300,000 with a fair value of $4,500,000. Elizabeth Pie also (1) holds a patent for a pie crustfluting machine that the company invented (the patent with a fair value of $300,000 was never recorded by Elizabeth Pie because itwas developed internally) and (2) estimates goodwill from loyal customers to be $310,000 (also never recorded by the company).If Elizabeth Pie Company management accepts Giant Bakery's offer of $5,000,000, compute the amount of goodwill that Giant Bakeryshould record on the date of the purchase.Goodwill

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For each of the following scenarios, select whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should be recorded. a. Machine Copyright b. C. Factory building d. Building $ Book Value 15,500 31,000 58,000 227,000 Answer is not complete. Estimated Future Cash Flows $ 10,000 41,000 29,000 227,000 Fair Value $ 9,500 37,900 27,000 200,000 Is Asset Impaired? Y N Y N ✓ ✓ Amount of Loss

For each of the following scenarios, select whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should be recorded. a. Machine Copyright b. C. Factory building d. Building $ Book Value 15,500 31,000 58,000 227,000 Answer is not complete. Estimated Future Cash Flows $ 10,000 41,000 29,000 227,000 Fair Value $ 9,500 37,900 27,000 200,000 Is Asset Impaired? Y N Y N ✓ ✓ Amount of Loss

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Elizabeth Pie Company has been in business for 50 years and has developed a large group of loyal restaurant customers. Giant Bakery Incorporated has made an offer to buy Elizabeth Pie Company for $4,600,000. The book value of Elizabeth Pie’s recorded assets and liabilities on the date of the offer is $3,500,000 with a fair value of $4,000,000. Elizabeth Pie also (1) holds a patent for a pie crust fluting machine that the company invented (the patent with a fair value of $385,000 was never recorded by Elizabeth Pie because it was developed internally) and (2) estimates goodwill from loyal customers to be $324,000 (also never recorded by the company). If Elizabeth Pie Company management accepts Giant Bakery's offer of $4,600,000, compute the amount of goodwill that Giant Bakery should record on the date of the purchase.
Taste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,000,000. Themarket value of Taste-T’s tangible assets, net of liabilities, on the date of the offer is $5,600,000.Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $200,000 was never recorded by Taste-T because it was developed internally). Howmuch has Down Home Foods included for intangibles in its offer of $6,000,000? Assuming TasteT accepts this offer, which company will report Goodwill on its balance sheet and at what amount?
) Young Company has provided information on intan- gible assets as follows. A patent was purchased from Ford Company for $1,000,000 on January 1, 2019. Young estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford’s accounting records at a net book value of $800,000 when Ford sold it to Young. During 2020, a franchise was purchased from Rainwater Company for $950,000. In addition, 5% of revenue from the franchise must be paid to Rainwater. Revenue from the franchise for 2020 was $6,000,000. Young estimates the useful life of the franchise to be 10 years and takes a full year’s amortization in the year of purchase. Young incurred research and development costs in 2020 as follows: Materials and equipment $336,000 Personnel 278,000 Indirect costs 173,000 $787,000 Young estimates that these costs will be recouped by December 31, 2020. The materials and equipment purchased have no alternative uses. On January 1, 2020,…
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In 2024, Bratten Fitness Company made the following cash purchases: The exclusive right to manufacture and sell the X-Core workout machine from Symmetry Corporation for $201,000. Symmetry created the unique design for the equipment. Bratten also paid an additional $10,500 in legal and filing fees to attorneys to complete the transaction. An initial fee of $250,000 for a three-year agreement with Silver’s Gym to use its name for a new facility in the local area. Silver’s Gym has locations throughout the country. Bratten is required to pay an additional fee of $5,100 for each month it operates under the Silver’s Gym name, with payments beginning in March of 2024. Bratten also purchased $401,000 of exercise equipment to be placed in the new facility. The exclusive right to sell Healthy Choice, a book authored by Kent Patterson, for $20,000. The book includes healthy recipes, recommendations for dietary supplements, and natural remedies. Bratten plans to display the book at the check-in…
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