Question
2-step Impairment Testing for Trade Names On January 1, 2019, Outkast Corporation applied for a trade name, incurring legal costs of $16,000. On January 1,
2-step Impairment Testing for Trade Names
On January 1, 2019, Outkast Corporation applied for a trade name, incurring legal costs of $16,000. On January 1, 2020, Outkast incurred $7,200 of legal fees in a successful defense of its trade name. All expenditures were made with cash. Outkast amortizes the trade name over 10 years.
On January 3, 2021, new market research revealed estimated future cash flows from the trade name to be $18,000 and the fair value to be $16,000.
Prepare all journal entries relating to this trade name for 2019 to 2023.
| Date | Account | Debit | Credit |
| 01/01/2019 |
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| 12/31/2019 |
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| 01/01/2020 |
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| 12/31/2020 |
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| 01/03/2021 |
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| 12/31/2021 |
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| 12/31/2022 |
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| 12/31/2023 |
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408041802, 1408041804, 978-1408048566, 1408048566, 978-1408093887
