Problem 12-5

Teal Mountain Golf Inc. was formed on July 1, 2016, 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 $780,000cash for Old Master. At the time, Old Master?s balance sheet reported assets of $630,000and liabilities of $190,000(thus owners? equity was $440,000). The fair value of Old Master?s assets is estimated to be $810,000. Included in the assets is the Old Master trade name with a fair value of $6,000and a copyright on some instructional books with a fair value of $19,200. The trade name has a remaining life of5years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of40years.

Problem 12-5 Teal Mountain Golf Inc. was formed on July 1. 2015. 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 instmctional business into his golf equipment and accessory stores. Magilke paid $380,000 cash for Old Master. At the time. Did Master's balance sheet reported assets of $630,000 and liabilities of $190,000 {thus owners' equity was $440,000}. The fair value of Old Master's assets is estimated to be $310,000. Included in the assets is the Old Master trade name with a fair value of $6,000 and a copyright on some instructional books with a fair value of $19,200. The trade name has a remaining life of 5 years and can be renewed at nominal cost indenitely. The copyright has a remaining life of 40 years. Prepare the intangible assets section of Teal Mountain Golf Inc. at Deoember 31, 2015. TEAL MOUNTAIN GOLF INC. Intangibles Section of Balance Sheet | $ How much amortization expense is included in Teal Mountain income for the year ended December 31, 2016? 1...... 5|:I Prepare the ioumal entry to record amortization expense for 201?. Prepare the intangible assets section of Teal Mountain Golf Inc. at December 31, 201?. (No impairments are required to be recorded in 201?.) (Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No En try" for the account titles and enter 0 for the amounts.) Menmt "u and Ewlana'on Debit Wit | | || TEAL MOUNTAIN GOLF INC. Intanglles Section of Balance Sheet At the end of 2013, Magilke is evaluating the results of the instructlonal businas. Due to erce competition from onllne and televlsion (e.g., the Golf Channel), the Old Master reportlng unit has been losing money. Its book value is now $460,000. The fair value of the Old Master reporting unlt is $380,000. The implied value of goodwill is $30,000. Magilke has collected the following information related to the company's intangible assets. Trade names $0,100 $2,700 Copyrights 27, 000 22,000 Prepare the journal entries requlred, if any, to record impairments on Teal Mountain intangible assets. (Assume that anyr amortizatlon for 2018 has been recorded.) {Cl-edit account titles are automatically lndented when amount ls entered. Do not lndent manually. If no entry ls requlred, select "No Entry" for the account titles and enter 0 for the amounts.) Amount Tll:les and Explanation Debit Credlt |