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13. Pontos Corporation buys 80% of the voting stock of Springfield Company on...

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Accounting

13.

Pontos Corporation buys 80% of the voting stock of Springfield Company on January 1, 2017. At the date of acquisition, it is determined that Springfield has a secret recipe for its famous cookies, not currently reported on its balance sheet, that has a fair value of $20,000. The secret cookie recipe meets ASC Topic 805 requirements for capitalization as an intangible asset, and has an estimated life of 5 years, straight-line.

On the consolidated balance sheet at December 31, 2020, at what value is the secret cookie recipe reported?

A)

$ 3,200

B)

$ 8,000

C)

$ 4,000

D)

$16,000

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