E$11\mathrm{.}7($L$01,2)($Accounting for Trade Name$)$ In early January $2024,$ Outkast Corporation applied for a trade name, incurring legal costs of $$16,000.$ In January $2025,$ Outkast incurred $$7,800$ of legal fees in a successful defense of its trade name.

Instructions

a$.$ Compute $2024$ amortization, $12/31/24$ book value, $2025$ amortization, and $\frac{12}{31}\frac{?}{25}$ book value if the company amortizes the trade name over $10$ years.

b$.$ Compute the $2025$ amortization and the $\frac{12}{31}\frac{?}{25}$ book value, assuming that at the beginning of $2025,$ Outkast determines that the trade name will provide no future benefits beyond December $31,2028.$

c$.$ Ignoring the response for part $($b$),$ compute the $2026$ amortization and the $\frac{12}{31}\frac{?}{26}$ book value, assuming that at the beginning of $2026,$ based on new market research, Outkast determines that the fair value of the trade name is $$15,000.$ Estimated total future cash flows from the trade name is $$16,000$ on January $3,2026.$