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P8-10 Computing Amortization, Book Value, and Asset Impairment Related to Different Intangible Assets LO8-3, 8-4, 8-6 Starn Tool Company has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these intangibles. Facts about each intangible follow: a. Patent. The company purchased a patent at a cash cost of $63,700 on January 1,2017. The patent has an estimated usoful life of 13 years. b. Copyright. On January 1, 2017, the company purchased a copyright for $25,500 cash. It is estimated that the copyrighted item will have no value by the end of 10 years. c Franchise. The company obtained a ranchise rom McKen na Company to make and dist ute a special tem. obtained he ranchise on an ar 20 at a cash cost f 0-ear eno d. License. On January 1, 2016, the company secured a license from the city to operate a special service for a period of five years. Total cash expended to obtain the license was $14,600 e. Goodwill. The company started business in January 2014 by purchasing another business for a cash lump sum of $460,000. Included in the purchase price was "Goodwill, $46,000. Company executives stated that "the goodwill is an important long-lived asset to us. It has an indefinite life. Required: 1. Compute the amount of amortization that should be recorded for each intangible asset at the end of the annual accounting period, December 31, 2017 S 4,900 a. Patent b. Copyright $ 2,550 c. Franchise1,500 d. License e Goodwill S 2,920 2. Determine the book value of each intangible asset on December 31, 2018 Book Valuc Dec. 31, 2018 Item a. Patent b. Copyright C. Franchise d. License e. Goodwil 53,900 20,400 12,000 5,840 46,000 Total book value $138,140 3. Assume that on January 2, 2019, the copyrighted item was impaired in its ability to continue to produce strang revenues. The other intangible assets were not affected. Starn estimated that the copyright wauld b able to produce future cash flows of S18,800. The fair value of the copyright was determined to be S17,800. Compute the amount, if any, of the impairment loss to be recorded. mpairment loss 1,000 3. Assume that on January 2, 2019, the copyrighted item was impaired in its ability to continue to pr able to produce future cash flows of $18,800. The fair value of the copyright was determined to be S Answer is complete but not entirely correct. Impairment loss $1,000