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Butler Corp. purchased a patent several years ago for $800,000. As of 12/31/18, amortization totaling $600,000 has already been recorded on the patent. At the

Butler Corp. purchased a patent several years ago for $800,000. As of 12/31/18, amortization totaling $600,000 has already been recorded on the patent.

At the end of 2018, Butler believes the future cash flows the patent will generate will equal $150,000. It also estimates the fair value of the patent to be $180,000.

How much of an impairment loss, if any, should Butler record in 2018 related to this patent?

A. $800,000

B. $200,000

C. $ 30,000

D. $ 20,000

E. $ 50,000

F. None. There is no impairment.

Hester Inc. paid $700,000 to purchase the net assets of Adam Corp. The following information regarding Adam Corp. is available at the time of purchase:

The book value of Adams identifiable net assets is $710,000

The fair value of Adams identifiable net assets is $770,000

In Hesters entry to record the purchase of Adam Corp., which of the following statements is true?

A. A gain of $70,000 should be recorded.

B. A loss of $70,000 should be recorded.

C. A gain of $10,000 should be recorded.

D. A loss of $10,000 should be recorded.

E. Goodwill of $70,000 should be recorded.

F. Goodwill of $10,000 should be recorded

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