Assume that Viva Enterprises's radio broadcast license is renewable at the end of each 10-year term...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that Viva Enterprises's radio broadcast license is renewable at the end of each 10-year term and management has provided evidence that approval of the renewal is highly probable. In this case, the broadcast license qualifies as an indefinite-life intangible asset and is not subject to amortization. Therefore, the firm carries the broadcast license at its original cost of $780,000. (Click the icon to view the additional information.) Assuming that renewal of the broadcast license is probable for this indefinite-life intangible asset, analyze the accounting for impairment and prepare the journal entries. Conduct the impairment test indicated for indefinite-life intangible asset at the end of the year and determine the impairment loss, if any. (If you selected "No" that an impairment loss is not indicated, then leave the impairment loss input cell blank. Show a loss with a parentheses or minus sign.) One-Step Impairment Test Broadcast License Impairment Indicated Impairment Loss, if any Next, prepare the journal entry required to record any impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account December 31, 2018 More Info On December 31, 2018, the company noted substantial declines in radio advertising revenues over the past year due to expanded satellite radio subscriptions, Internet broadcasts, and the use of iPod players. Based on the required annual review and consideration of the available impairment indicators. management believes that it is more likely than not that the broadcast license may be impaired. Therefore, the company must test the broadcast license for impairment. Similar broadcast licenses have been sold in auctions for $672,000. Print Done Assume that Viva Enterprises's radio broadcast license is renewable at the end of each 10-year term and management has provided evidence that approval of the renewal is highly probable. In this case, the broadcast license qualifies as an indefinite-life intangible asset and is not subject to amortization. Therefore, the firm carries the broadcast license at its original cost of $780,000. (Click the icon to view the additional information.) Assuming that renewal of the broadcast license is probable for this indefinite-life intangible asset, analyze the accounting for impairment and prepare the journal entries. Conduct the impairment test indicated for indefinite-life intangible asset at the end of the year and determine the impairment loss, if any. (If you selected "No" that an impairment loss is not indicated, then leave the impairment loss input cell blank. Show a loss with a parentheses or minus sign.) One-Step Impairment Test Broadcast License Impairment Indicated Impairment Loss, if any Next, prepare the journal entry required to record any impairment loss. (Record debits first, then credits. Exclude explanations from any journal entries. If no entry is required select "No Entry Required" on the first line of the journal entry table and leave all remaining cells in the table blank.) Account December 31, 2018 More Info On December 31, 2018, the company noted substantial declines in radio advertising revenues over the past year due to expanded satellite radio subscriptions, Internet broadcasts, and the use of iPod players. Based on the required annual review and consideration of the available impairment indicators. management believes that it is more likely than not that the broadcast license may be impaired. Therefore, the company must test the broadcast license for impairment. Similar broadcast licenses have been sold in auctions for $672,000. Print Done
Expert Answer:
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
Posted Date:
Students also viewed these physics questions
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Repeat the analysis of problem 14.7, but this time focus on the Facebook call and put options in Figure 14.1 that have a strike price of $87.50. If you use put-call parity to find the price of...
-
Finding equilibria of nonlinear coupled differential equations requires solving nonlinear simultaneous equations that can have any number of solutions. For each of the following pairs, solve each...
-
Subtract the rational expressions. Y 9 y-4y - 21 y-7
-
I want sales representatives who can stand on their own. Once they have been through training and show how to apply their knowledge, it shouldnt be necessary for me to constantly tell them how they...
-
Ekman Company issued $1,000,000, 10-year bonds and agreed to make annual sinking fund deposits of $78,000. The deposits are made at the end of each year into an account paying 5% annual interest....
-
The Ferre Publishing Company provided the following data for its three service departments and two operating departments. Costs Service Departments Administration Janitorial $ 140,000 Square feet of...
-
You were a chosen accountant by the CEO of your company. He has asked you to do due diligence on another company he's interested in acquiring. The business in question does not have cash. However,...
-
Insignias financial statements reporting a change in accounting policy, with respect to the method of recognizing the ___________ or any changes in estimates for returns, that lead to decreasing the...
-
Explain why overstating sales by holding books open after the close of a period would cause CFFO to lag behind operating income.
-
Insignia subtracted its allowance for ___________ from its gross revenue to arrive at net revenue.
-
One of the signals of Xeroxs fictitious reporting is the lagging of CFFO behind net income, and it should be flagged through the following activities: (a) Reduction in CFFO, from 25% of net income in...
-
A beam of light containing all the visible wavelengths from \(400 \mathrm{~nm}\) to \(700 \mathrm{~nm}\) passes through a pair of parallel slits that are \(2.50 \mu \mathrm{m}\) apart. These slits...
-
At 30 June 2016, Grace Ltd had the following deferred tax balances: Deferred tax liability$18 000 Deferred tax asset15 000 Grace Ltd recorded a profit before tax of $80 000 for the year to 30 June...
-
What are the before image (BFIM) and after image (AFIM) of a data item? What is the difference between in-place updating and shadowing, with respect to their handling of BFIM and AFIM?
-
A project under consideration has a 10-year projected life. The initial investment for the project is estimated to have a mean of \(\$ 10,000\) and a standard deviation of \(\$ 1,000\). The annual...
-
True or False: In determining the optimum replacement interval, it is necessary to assume negligible salvage values.
-
Uncertainty can impact many elements of an engineering economic analysis. Given the list of factors below, rank them from most to least uncertain, and briefly justify why you ranked them in that...
Study smarter with the SolutionInn App