Calculate annual amortization of trademark

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Point 1: Milani, Inc., acquired 10 percent of Seida Corporation on January 1, 2017, for $197,000 and appropriately accounted for the investment using the fair-value method. On January 1, 2018, Milani purchased an additional 30 percent of Seida for $688,000 which resulted in significant influence over Seida. On that date, the fair value of Seida's common stock was $2,090,000 in total. Seida's January 1, 2018 book value equaled $1,940,000, although land was undervalued by $130,000. Any additional excess fair value over Seida's book value was attributable to a trademark with an 8-year remaining life. During 2018, Seida reported income of $288,000 and declared and paid dividends of $116,000. Prepare the 2018 journal entries for Milani related to its investment in Seida.

Question 1: How do you calculate annual amortization of Trademark?

Reference no: EM132479693

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