The following information relates to a patent owned by Gentry Company: Cost $3,400,000 ...
70.2K
Verified Solution
Link Copied!
Question
Accounting
The following information relates to a patent owned by Gentry Company:
Cost $3,400,000
Carrying amount 1,700,000
Expected future net cash flow 1,500,000
Fair value 1,200,000
(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2019.
(b) Using the same assumption as part (a) above, prepare the journal entry to record amortization expense for 2020 assuming the asset has a remaining useful life of 3 years at the beginning of 2020.
(c) Using the same assumption as part (a) above, prepare the journal entry (if any) at December 31, 2020, assuming the fair value of the asset has increased to $1,900,000.
(d) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2019, assuming Gentry ceased using the patent at the end of 2019 and intends to dispose of the patent in the coming year. Gentry expects to incur a $10,000 cost of disposal.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
