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A wholly-owned subsidiary's revalued net assets at the date of acquisition consist of indefinite life identifiable...

A wholly-owned subsidiary's revalued net assets at the date of acquisition consist of indefinite life identifiable intangible assets valued at $500,000 at the date of acquisition. Impairment of these intangibles as of the beginning of the current year is $50,000, and impairment testing for the current year reveals $200,000 in additional impairment on these intangibles.

Consolidation eliminating entry (O) at the end of the current year reduces identifiable intangible assets by:

A.

$50,000.

B.

$200,000.

C.

$250,000.

D.

$500,000.
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Answer #1

c) $250,000

As $50,000 was already impairment expense and for the current year additional expense is $200,000. Total $250,000 will be in impairment expense and thus asset will be reduced by this much amount.

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