Their goodwill and intangible assets, net decreased from 2020 to 2021 which is the sum of the carrying amounts of the intangible assets on the balance sheet, net of the accumulated amortization and impairment charges. Do you agree? Please explain.
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- At the end of 2020, Magenta Manufacturing Company discovered that construction cost had been capitalized as a cost of the factory building in 2015 when it should have been treated as a cost of production equipment installation costs. As a result of the misclassification, the depreciation through 2018 was understated by 110,000, and depreciation for 2019 was understated by 90,000. What would be the consequences of correcting for the misclassification of the property cost? a. The taxpayer uses the FIFO inventory method, and 25% of goods produced during the period were included in the ending inventory. b. The taxpayer uses the LIFO inventory method, and no new LIFO layer was added during 2019.At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial reporting purposes, the asset has a 4-year life with no residual value and is depreciated by the straight-line method beginning in 2019. For tax purposes, the asset is depreciated under MACRS using a 5-year recovery period. Prior to 2019, Conley had no deferred tax liability or asset. The difference between depreciation for financial reporting purposes and income tax purposes is the only temporary difference between pretax financial income and taxable income. The current income tax rate is 30%, and no change in the tax rate has been enacted for future years. In 2019 and 2020, taxable income will be higher or lower than financial income by what amount?In 2022, Mao Li Corporation determined that a production machine used in its operations was impaired and an impairment loss of HK$110,000 was recognized. In 2023, the fair value of the asset increased by HK$170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2023 under IFRS?
- In 2022, Mao Li Corporation determined that a production machine used in its operations was impaired and an impairment loss of HK$110,000 was recognized. In 2023, the fair value of the asset increased by HK$170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2023 under IFRS? Group of answer choices IFRS does not permit recognition of gains on reversal of previous impairment loss write-downs. IFRS allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. IFRS permits the recognition of this impairment reversal as income from continuing operations. IFRS permits the recognition of this impairment reversal as other comprehensive income.In 2022, Mao Li Corporation determined that a production machine used in its operations was impaired and an impairment loss of HK$110,000 was recognized. In 2023, the fair value of the asset increased by HK$170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2023 under IFRS? Group of answer choices IFRS allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. IFRS permits the recognition of this impairment reversal as income from continuing operations. IFRS does not permit recognition of gains on reversal of previous impairment loss write-downs. IFRS permits the recognition of this impairment reversal as other comprehensive income.During 2022, Twenti Company, had the following transactions: On January 2, Twenti purchased the net assets of Terti Company for P360,000. The fair value of Terti’sidentifiable net assets was P172,000, Twenti believes that, due to the popularity of Terti’s consumerproducts, the life of the resulting goodwill is unlimited. On February 1, Twenti purchased a franchise to operate a ferry service from the state government forP60,000 and an annual fee of 1% of ferry revenues. The franchise expires after five years. Twentireceived P20,000 of ferry revenues in 2022. On April 5, Twenti granted a patent that had been applied for by Terti. During 2022, Twenti incurredlegal costs of P51,000 to register the patent and an additional of P85,000 to successfully prosecute apatent infringement suit against a competitor. Twenti estimates the patent’s economic life to be tenyears.Twenti has determine that it is appropriate to amortize these intangibles on the straight line basis over themaximum period…
- In 2019, Alliant Corporation acquired Centerpoint Inc. for $300 million, of which $50 million was allocated to goodwill. At the end of 2021, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Inc. $ 220 million Book value of Centerpoint’s net assets (excluding goodwill) 200 million Book value of Centerpoint’s net assets (including goodwill) 250 million 1. Determine the amount of the impairment loss. 2. Determine the amount of the impairment loss assuming that the fair value of Centerpoint is $270 million.1. On May 1, 2019, ABC Corporation bought a trademark from DEF Corporation for P300,000. Its unamortized cost on DEF’s accounting records was P112,000. ABC Corp decided to amortize the trademark over its legal life from the date of purchase. What amount should the trademark be reported on its December 31, 2019, ABC’s Financial Position? 2. An entity is performing an annual test of the impairment of goodwill for a cash-generating unit. It has determined that the fair value of the unit exceeds the carrying amount. Which statement is true concerning the test of impairment? A. Goodwill should be written down as impaired. B. Impairment is not indicated and no additional analysis is necessary. C. Goodwill should be retested at the entity level. D. The assets and liabilities should be valued to determine if there has been an impairment of goodwill. 3. Which of the following items would qualify as an intangible asset? A. Advertising and promotion on the launch of a huge product B.…In 2019, Alliant Corporation acquired Centerpoint Inc. for $300 million, of which $50 million was allocated to goodwill. At the end of 2021, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Inc. $220millionBook value of Centerpoint’s net assets (excluding goodwill) 200millionBook value of Centerpoint’s net assets (including goodwill) 250million Required:1. Determine the amount of the impairment loss.2. Repeat requirement 1 assuming that the fair value of Centerpoint is $270 million.
- In 2019, Alliant Corporation acquired Centerpoint Inc. for $300 million, of which $50 million was allocated to goodwill. At the end of 2021, management has provided the following information for a required goodwill impairment test: Fair value of Centerpoint Inc.$220million Book value of Centerpoint’s net assets (excluding goodwill) 200million Book value of Centerpoint’s net assets (including goodwill) 250million Determine the amount of the impairment lossShellfish Company determined that, due to the obsolescence, equipment with an original cost of P180,000 and accumulated depreciation at January 1, 2020 of P84,000 had suffered permanent impairment, and as a result should have fair value of only P60,000 as of the beginning of the year. Additionally, the remaining useful life of the equipment was reduced from eight years to three years. If the company’s policy is to credit accumulated depreciation when a PPE is impaired, how much should selfless report as accumulated depreciation in its December 31, 2020 statement of financial position?In 2021, Dooling Corporation acquired Oxford Company for $250 million, of which $50 million was recorded as goodwill. Dooling tests for goodwill impairment at the end of each fiscal year. At the end of 2021, Dooling's accountants provide the following information: Book value of Oxford company (including goodwill) ..................... $234.5 million fair value of Oxford Company’s tangible and intangible assets (excluding goodwill) ........................................................... $204.9 million fair value of Oxford Company .................................................. $225 million how much goodwill impairment loss should Dooling Corporation report at the end of 2021?
