Homework Answers
| 1. 2016 Amortization = $16080/10years |
| = $1608 |
| 12/31/2016 Book Value = $16080-$1608 = $14472 |
| 2017 Amortization = ($14472 +$7880)/9 = $2483.56 |
| 13/31/2017 Book Value = ($14472+$7880-2483.56) = $19868.44 |
| B) Assuming trade names will provide no future benefits beyond December 2020 |
| 2017 Amortization = ($14472 +$7880)/4 = $5588 |
| 12/31/2017 Book Value = ($14472 +$7880- $5588)= $16764 |
| C) |
| Carrying Amount 19868.44 is greater than future cash flows $15760, thus the Trade name fails the recovery test. The new carrying value is $14560, the trade name's fair value |
| 2018 Amortization (After recording impairment loss) |
| $14560/8 = $1820 |
| 12/31/2018 Book Value = ($14560-$1820) = $12740 |
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