What company income statement will report amortization

Reference no: EM132785282

problem 1: Indicate whether the following items are capitalized or expensed in the current year:

a. Purchase cost of a patent from a competitor.

b. Research costs.

c. Development costs (after achieving economic viability).

d. Costs incurred internally to create goodwill.

problem 2: On January 1, 2017, a company purchased copyrights with a cost $2,320,000, a useful life of 5 years. The company uses straight-line depreciation. At December 31, 2018, the company determines that impairment indicators are present. The fair value less costs to sell the copyrights is estimated to be $1,080,000. The copyrights' value-in-use is estimated to be $1,130,000. The asset's remaining useful life is estimated to be 2 years.

(1) The company's 2018 income statement will report Loss on Impairment of:

a. 0.

b. 262,000.

c. 312,000.

d. 1,190,000.

(2) The company's 2019 income statement will report amortization expense for the copyrights of:

a. 377,000.

b. 464,000.

c. 565,000.

d. 1,190,000.

Reference no: EM132785282

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