Question
Paradise Duke's Golf Inc. formed on July 1, 2014, when Duke Antony bought Brillian Masters Golf Company. Brilliant Master provides video golf instruction at a
Paradise Duke's Golf Inc. formed on July 1, 2014, when Duke Antony bought Brillian Masters Golf Company. Brilliant Master provides video golf instruction at a kiosk in a shopping mall. Antony plans to integrate his golf training services business into his golf equipment business and accessory shop. Antony paid 770,000 cash for Brillian Masters. At that time, Brillian Master associated with the position Its finances report assets of 650,000 and liabilities of 200,000 (thus equity 450,000). Score Brillian Masters' fair assets are estimated at 800,000. Included in the assets are the trade names of Brilliant Masters with fair values of 10,000 and copyright on several instructional books fair value of 24,000. Trade names have a remaining life of 5 years and are renewable for a nominal fee indefinitely. Right copyright has a life of 40 years. Instructions: (a) Prepare part of Paradise Matt's Golf Inc.'s intangible assets. on December 31, 2014. How much does it cost amortization included in Paradise Matt's income for the year ended December 31, 2014? Show all supported computations. (b) Prepare journal entries to record amortization expense for 2015. Prepare the intangible assets section from Paradise Matt's Golf Inc. as of December 31, 2015. (No impairments required to be noted in 2015.) (c) At the end of 2016, Antony was evaluating the results of the training services business. Because of the fierce competition from online and television (eg, Golf Channel), to Cash Generating Units (see note) from Brilliant Masters loss. The book value is now 500,000. The recoverable amount of the Brilliant Masters is 420,000. Antony has gathered the following information which relates to company assets that are not tangible. Intangible Asset Value Usage Trade name 3,000 Copyright 25,000 Prepare the necessary journal entries, if any, to record impairments on Paradise's intangible assets Matt. (Assume that any amortization for 2016 has been recorded.) Show the supporting computations. Note: According to IFRS, the Cash Generating Unit is the smallest group of assets to independently generate cash flows and whose cash flows are largely independent of the cash flows generated by other assets. Concept These are used by international financial reporting standards in determining impairment of assets. No concept Cash Generating Units, it can be very difficult to determine the cash flows associated with individual assets impairment analysis
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