In early January 2014, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In
Question:
In early January 2014, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In January 2015, Reymont incurred $7,800 of legal fees in a successful defense of its trade name.
Instructions
(a) Compute 2014 amortization, 12/31/14 book value, 2015 amortization, and 12/31/15 book value if the company amortizes the trade name over 10 years.
(b) Compute the 2015 amortization and the 12/31/15 book value, assuming that at the beginning of 2015, Reymont determines that the trade name will provide no future benefits beyond December 31, 2018.
(c) Ignoring the response for part (b), compute the 2016 amortization and the 12/31/16 book value, assuming that at the beginning of 2016, based on new market research, Reymont determines that the recoverable amount of the trade name is $16,000.
Step by Step Answer:
Intermediate Accounting IFRS Edition
ISBN: 9781118443965
2nd Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield