close solutoin list

Probst Company acquired a trademark several years ago at a cost of $60,000. Probst has never considered the trademark to be impaired. However, at the end of 2019, Probst has determined that the trademark is impaired because of a change in market conditions. It estimates that the trademark has a fair value of $40,000 at the end of 2019. Required: 1. Prepare Probst’s journal entry (if any) to record the impairment of its trademark at the end of 2019. 2. Next Level Assume Probst uses IFRS. If Probst estimates that the cost of selling the trademark is zero but the value-in-use is $45,000, prepare Probst’s journal entry to record the impairment of its trademark at the end of 2019. Explain any differences between the impairment loss calculated under IFRS and the impairment loss calculated under U.S. GAAP. 3. Assume, instead, that Probst estimated that the trademark had a fair value of $70,000 at the end of 2019. How would Probst account for this if it were using (a) U.S. GAAP or (b) IFRS?

BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281
BuyFind

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
Publisher: Cengage Learning
ISBN: 9781337788281

Solutions

Chapter
Section
Chapter 12, Problem 15E
Textbook Problem

Probst Company acquired a trademark several years ago at a cost of $60,000. Probst has never considered the trademark to be impaired. However, at the end of 2019, Probst has determined that the trademark is impaired because of a change in market conditions. It estimates that the trademark has a fair value of $40,000 at the end of 2019.

Required:

  1. 1. Prepare Probst’s journal entry (if any) to record the impairment of its trademark at the end of 2019.
  2. 2. Next Level Assume Probst uses IFRS. If Probst estimates that the cost of selling the trademark is zero but the value-in-use is $45,000, prepare Probst’s journal entry to record the impairment of its trademark at the end of 2019. Explain any differences between the impairment loss calculated under IFRS and the impairment loss calculated under U.S. GAAP.
  3. 3. Assume, instead, that Probst estimated that the trademark had a fair value of $70,000 at the end of 2019. How would Probst account for this if it were using (a) U.S. GAAP or (b) IFRS?

Expert Solution

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Solution

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 12 Solutions

Intermediate Accounting: Reporting And Analysis
Show all chapter solutions
Ch. 12 - Which costs associated with a franchise are...Ch. 12 - What justifies the different treatment given to...Ch. 12 - Over how many years are patents amortized?...Ch. 12 - List four factors that cause the market value of...Ch. 12 - Under what conditions is goodwill capitalized at...Ch. 12 - Under what conditions is purchased goodwill...Ch. 12 - It has been proposed that purchased goodwill...Ch. 12 - What is meant by the term bargain purchase? How is...Ch. 12 - How does the measurement and reporting of impaired...Ch. 12 - Explain how research and development expenditures...Ch. 12 - What is the proper time or time period over which...Ch. 12 - Plaza Company originated late in 2018 and began...Ch. 12 - Frye Company incurred RD costs in 2019 as follows:...Ch. 12 - Which of the following assets typically are...Ch. 12 - Which of the following amounts incurred in...Ch. 12 - A purchased patent has a remaining legal life of...Ch. 12 - During 2015, Traco Machine Company spent 176,000...Ch. 12 - Sherwood Corporation incurred 68,000 of RD costs...Ch. 12 - Goodwill represents the excess of the purchase...Ch. 12 - Flint Corporations general ledger as of December...Ch. 12 - Steel Magnolia Incorporated purchased a trademark...Ch. 12 - Match the following items with correct accounting...Ch. 12 - Notting Hill Company incurred the following costs...Ch. 12 - Hook Corp. incurred the following start-up costs,...Ch. 12 - Mystic Pizza Company purchased a patent from Prime...Ch. 12 - Mystic Pizza Company purchases a franchise from NY...Ch. 12 - Closer Co. incurred and paid the following costs...Ch. 12 - Prepare Closers initial journal entry(s) to record...Ch. 12 - Grand Champion Inc. purchased Americas Sweethearts...Ch. 12 - Using the information from RE12-9, assume that...Ch. 12 - Befort Company filed for a patent on a new type of...Ch. 12 - On January 4, 2019, Franc Company purchased for...Ch. 12 - On January 11, 2019, Hughes Company applied for a...Ch. 12 - Gansac Publishing Company signed a contract with...Ch. 12 - Bouden Company performed the following activities:...Ch. 12 - Danielson Inc. incurred the following costs: a....Ch. 12 - KLK Clothing Company manufactures professional...Ch. 12 - Cressman Company incurred RD costs for various...Ch. 12 - In 2019, Lalli Corporation incurred RD costs as...Ch. 12 - Kling Company was organized in late 2019 and began...Ch. 12 - Barnum Company acquired several small companies at...Ch. 12 - Brush Company engaged in the following...Ch. 12 - Davis Research Company engaged in the following 5...Ch. 12 - Barb Company has provided information on...Ch. 12 - Probst Company acquired a trademark several years...Ch. 12 - In 2019, eGames spent 8,000,000 developing new...Ch. 12 - Company is considering purchasing EKC Company....Ch. 12 - Marino Company had the following balance sheet on...Ch. 12 - Several years ago, Blaha Company purchased Husker...Ch. 12 - Jolis Company has provided information on the...Ch. 12 - Byrd Corporation engaged in the following...Ch. 12 - During the current year, Cartwright Corporations...Ch. 12 - During the year-end audit of Cressman Corporations...Ch. 12 - Halpern Companys controller prepared the following...Ch. 12 - Bailey Company was formed in January 2017 and is...Ch. 12 - Wember Company acquired a subsidiary company on...Ch. 12 - Hamilton Companys balance sheet on January 1,...Ch. 12 - Munn Inc. had the following intangible account...Ch. 12 - Lee Manufacturing Corporation was incorporated on...Ch. 12 - Information concerning Tully Corporations...Ch. 12 - Bryant Corporation was incorporated on December 1,...Ch. 12 - In examining Samson Manufacturing Companys books,...Ch. 12 - Clonal Inc., a biotechnology company, developed...Ch. 12 - Elson Corporation, a retail fuel oil distributor,...Ch. 12 - Some intangible assets that companies may report...Ch. 12 - On June 30, 2019, your client, Sprauge...Ch. 12 - In 1975, a trial was held to settle a tax dispute...Ch. 12 - NBC paid 401 million for the rights to televise...Ch. 12 - You are auditing the financial records of a...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
What are the steps required to develop a social media plan?

Foundations of Business (MindTap Course List)

Why is productivity important?

Essentials of Economics (MindTap Course List)

Explain cause-related marketing

MKTG 12:STUDENT ED.-TEXT

What is meant by catering theory, and how might it impact a firm's dividend policy?

Fundamentals of Financial Management (MindTap Course List)

How does the journal differ from the ledger?

College Accounting (Book Only): A Career Approach

What are some actions that stockholders can take to ensure that managements and stockholders interests are alig...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What kind of firm would use a job order cost system?

Survey of Accounting (Accounting I)

What is the economic order quantity?

Cornerstones of Cost Management (Cornerstones Series)

Should the United States attempt to reduce air and water pollution to zero? Why or why not?

Microeconomics: Private and Public Choice (MindTap Course List)