Five years ago, Monroe, Inc, purchased a patent for $110,000 . Lower demand for the product produced under this patent necessitates that an impairment test be made. On the date of purchase, the patent had an estimated useful life of eleven years. It currently has a remaining useful life of four years. The current fair value of the patent is $43,000 . Company management estimates that the patent
will generate future cash flows of $12,000 per year for the next four years. The amount of the impairment loss to be recognized is
a. $50,000.
b. $60,000.
c. $12,000.
d. $17,000.
D
You might also like to view...
The economic profit generated by a company is its ________
A) (capital x cost of capital) / net profit B) net profit / (capital x cost of capital) C) net profit + (capital x cost of capital) D) net profit - (capital x cost of capital) E) (capital x cost of capital) - net profit
Writers should outline a message first to speed up the writing process
Indicate whether the statement is true or false
Describe the varying degrees to which closely held corporations and publicly traded corporations are regulated.
What will be an ideal response?
The times-interest-earned ratios of Benin, Inc. are 20.56 and 7.35 for 2016 and 2017, respectively. Which of the following can be the possible reason for such a change?
A) Benin, Inc. incurred less debt specifically in its revolving line of credit. B) Benin, Inc. incurred more debt specifically in its revolving line of credit. C) Benin, Inc. paid less interest in its revolving line of credit. D) Benin, Inc.'s debt-paying ability increased.