Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,600 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated undiscounted future cash flows from the trade name are $64,000 on January 4, 2018. On January 4, 2018, what should be recognized as the impairment loss? A) $6,800 B) $10,800 C) $11,150 D) $19,800 E) No impairment loss

Q4. Firoz Corp. obtained a trade name in January 2010, incurring legal costs of SAR15,000. The company amortizes the trade name over 8 years. Firoz, successfully defended its trade name in January 2011, incurring SAR 4,900 in legal fees. At the beginning of 2012, based on new marketing research, Firoz determines that the recoverable amount of the trade name is SAR 12,000. Required: a. Prepare the necessary journal entries on amortization for the years ending December 31, 2010 & 2011. b. In 2012, will Firoz meet any impairment loss? If yes, prepare journal entry to record the impairment loss and amortization entry on 31st Dec 2012

On January 1, 2014, Borstad Company purchased equipment for $1,150,000. It is depreciating the equipment over 25 years using the straight-line method and a zero residual value. Late in 2019, because of technological changes in the industry and reduced selling prices for its products, Borstad believes that its equipment may be impaired and will have a remaining useful life of 8 years. Borstad estimates that the equipment will produce cash inflows of $450,000 and will incur cash outflows of $341,000 each year for the next 8 years. It is not able to determine the fair value of the equipment based on a current selling price. Borstad’s discount rate is 10%.   Required: 1. Prepare schedules to determine whether, at the end of 2019, the equipment is impaired and, if so, the impairment loss to be recognized. 2. Prepare the journal entry to record the impairment. 3. Next Level How would your answer to Requirement 1 change if the discount rate was 14% and the cash flows were expected…

Llungby AB spent 1,000,000 krone in 2020 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for five years.   Assume that Llungby AB is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.   Required: Prepare journal entries for development costs for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP.