Intangible assets section

Assignment Help Accounting Basics
Reference no: EM13761547

Pacific Inc. was formed on July 1, 2012 when Roy Clemons purchased the Coastal Bike Company. Coastal Bike organizes and provides bike tours along U.S. coastal areas. Clemons paid $350,000 cash for Coastal Bike. At the time, Coastal Bike's balance sheet reported assets of $400,000 and liabilities of $300,000 (thus stockholders equity was $100,000). The fair value of Coastal Bike's assets is estimated to be $540,000. Included in the assets is the Coastal Bike trade name with a fair value of $60,000 and a copyright on some tour books with a fair value of $20,000. The trade name has a remaining life of 10 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 20 years.

(a) Prepare the intangible assets section of Pacific Inc. at December 31,2012. How much amortization expense is included Pacific's income for the year ended December 31,2012? Show all supporting computations.

(b) Prepare the journal entry to record amortization expense for 2013. Prepare the intangible assets section of Pacific Inc. at December 31, 2013. (No impairments are required to be recorded in 2013.)

(c) At the end of 2014, Clemons is evaluating the results of the tour business. Due to fierce competition from other online businesses, the Coastal Bike reporting unit has been losing money. Its book value is now $225,000. The fair value of the Coastal Bike reporting unit is $150,000. The implied value of goodwill is $35,000. Clemons has collected the following information related to the company's intangible assets.

                                                                   Expected Cash Flows

                       Intangible Asset                      (Undiscounted)                          Fair Values

                            Trademark                                  45,000                                     16,000

                           Copyrights                                  26,000                                     14,000

Prepare the journal entries required, if any, to record impairments on Pacific's intangible assets. (Assume that any amortization for 2014 has been recorded.) Show supporting computations.

Reference no: EM13761547

Questions Cloud

Write a paper on grace hopper and steven spielberg : Write a 1,050- to 1,400-word paper on Grace Hopper (computer scientist) and Steven Spielberg (film director).
Advanced nursing role : Personal values and beliefs about nursing, health, environment, and patient care delivery.
Managing a merger : Imagine you work for Quality Corporation (Quality.ad) who has just recently bought Crescent Inc. (Crescent.ad) in a recent merger. Quality and Crescent have separate offices in St. Louis (Quality HQ), Little Rock, and Austin (Crescent HQ). Crescen..
Describe best practices in cybersecurity : Describe and apply the 14 areas of common practice in the Department of Homeland Security (DHS) Essential Body of Knowledge. Describe best practices in cybersecurity.
Intangible assets section : Prepare the intangible assets section of Pacific Inc. at December 31,2012. How much amortization expense is included Pacific's income for the year ended December 31,2012? Show all supporting computations.
Write a review on case study splitting by gordon matta clark : Write a review on the case study Splitting by Gordon Matta Clark.
What will be the value stored in edi : Assuming that 00417005 is the address loaded in EDI, what will be the value stored in EDI following the repne scasb instruction? What will be stored in ECX
Write an essay on love philosophy and shakespeare : Write a 1500 words essay on Love, philosophy, shakespeare.
Modify the test score application : Modify the Test Score application so that it uses Big Decimal arithmetic to calculate the average test score with result rounded to 1 decimal place. Note that because the scoreCount and scoreTotal are int, you don't have to create the Big Decimal ..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Indicate the net effect of transaction of on equations

Paid utilites using the folloing column headings, identify the accounts involved and indicate the net effect of each transaction of on the accounting equations.

  Give the entries to record the receipt of the subscription

Give the entries to record the receipt of the subscription fees and to adjust the accounts

  On january 1 molini corporation had 95 000 shares of nopar

on january 1 molini corporation had 95 000 shares of nopar common stock issued and outstanding. the stock has a

  Pie safe companys beginning work in process inventory

pie safe companys beginning work in process inventory included 10000 units that are 20 complete with respect to direct

  Discuss how inflation or purchasing power impacts stated or

explain how inflation or purchasing power impacts stated or nominal interest rates.what are the pros and cons of

  Bap corporation uses a 12 target rate of return for new

bap corporation is reviewing an investment proposal. the initial cost and estimates of the book value of the investment

  Describe accounts receivable

Describe accounts receivable and how they occur and are recorded

  Case study - forensic accountants: fraud busters

Exactly what forensic accountants are. People who work in this growing field investigate such white-collar crimes as business fraud, improper financial reporting, and illegal investment schemes.

  Shapiro inc was incorporated in 2010 to operate as a

shapiro inc was incorporated in 2010 to operate as a computer software service firm with an accounting fiscal year

  Leonard basis in the building

Leonard received $150,000 insurance proceeds and deducted a $50,000 casualty loss. What is Leonard's basis in the building before any repairs are made?

  What is the difference between operations costing and a

what is the difference between operations costing and a process costing system? how does a company decide whether to

  Result of increase in fair value of investments

At December 31, 2008, the fair value of the securities was $585,000. What should Quinn report on its 2008 income statement as a result of the increase in fair value of the investments in 2008?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd