In early January 2021, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In
Question:
In early January 2021, Reymont Corporation applied for a trade name, incurring legal costs of $18,000. In January 2022, Reymont incurred $7,800 of legal fees in a successful defense of its trade name.
Instructions
a. Compute 2021 amortization, 12/31/21 book value, 2022 amortization, and 12/31/22 book value if the company amortizes the trade name over 10 years.
b. Compute the 2022 amortization and the 12/31/22 book value, assuming that at the beginning of 2022, Reymont determines that the trade name will provide no future benefits beyond December 31, 2025.
c. Ignoring the response for part (b), compute the 2023 amortization and the 12/31/23 book value, assuming that at the beginning of 2023, based on new market research, Reymont determines that the recoverable amount of the trade name is $12,000.
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield