Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Larkspur Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at

image text in transcribed
image text in transcribed
Larkspur Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equipment and accessory stores. Magilke paid $770,000 cash for Old Master. At the time, Old Master's balance sheet reported assets of $670,000 and liabilities of $210,000 (thus owners' equity was $460,000). The fair value of Old Master's assets is estimated to be $800,000. Included in the assets is the Old Master trade name with a fair value of $12,000 and a copyright on some instructional books with a fair value of $43,200. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 40 years. (c) Your answer is partially correct. At the end of 2021. Magilke is evaluating the results of the instructional business. Due to fierce competition from online and television (eg, the Golf Channel), the Old Master reporting unit has been losing money. Its book value (excluding the Tradenames and Copyrights) is now $410,000. The fair value of the Old Master reporting unit is $330,000. Magilke has collected the following information related to the company's intangible assets. Intangible Asset Trade names Copyrights Expected Cash Flows (undiscounted) $13,800 46.000 Fair Values $4,600 41,000 Prepare the journal entries required, if any, to record impairments on Larkspur intangible assets. Assume that any amortization for 2021 has been recorded.) (Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Debit Credit Account Titles and Explanation Loss on impairment 159200 Copyrights 9200 Trade Names 150000 List of Accounts Save for Later Attempts: 1 of 5 used Submit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing As A Career

Authors: Richa Yamini Goel

1st Edition

B09RMBWZ2L, 979-8412866512

More Books

Students also viewed these Accounting questions

Question

Evaluate the following integrals. y2 dy + 27 y3

Answered: 1 week ago

Question

Do inner and left joins produce same reseults

Answered: 1 week ago

Question

6. Identify characteristics of whiteness.

Answered: 1 week ago

Question

9. Explain the relationship between identity and communication.

Answered: 1 week ago