Computing Impairment of Intangible Assets

Stiller Company had the following information for its three intangible assets.

Patent: A patent was purchased for $$240,000$ on June $30$ of Year $1$; Stiller estimated the useful life of the patent to be

$15$ years. On December $31$ of Year $3,$ the estimated future cash flows attributed to the patent were $$204,000.$ The fair

value of the patent was $$180,000.$

Trademark: A trademark was purchased for $$12,000$ on August $31$ of Year $2.$ The trademark is considered to have an

indefinite life. The fair value of the trademark on December $31$ of Year $3$ is $$6,000.$

Goodwill: Stiller recorded goodwill in January of Year $2,$ related to a purchase of another company. The carrying

value of goodwill is $$72,000$ on December $31$ of Year $3.$ On December $31$ of Year $3,$ the segment for which the goodwill

relates had a fair value of $$1,392,000.$ The book value of the net assets of the segment $($including goodwill$)$ is

$$1,440,000.$

a$.$ Classify each of the intangible assets above as a finite life intangible or an indefinite life intangible.

b$.$ Determine the carrying value of each intangible asset on December $31$ of Year $3,$ prior to testing for impairment.

Assume that the company uses the straight$-$line method to amortize intangible assets, and no impairment was

reported prior to Year $3.$

Note: Round each of your answers to the nearest whole dollar.

c$.$ Test each asset for impairment assuming that the qualitative assessment indicated that further impairment testing

was warranted. Determine the carrying value of each asset on December $31$ of Year $3$ after impairment testing.

Note: Round each of your answers to the nearest whole dollar.