WGU D104 PA 1 WITH CORRECT
ANSWERS VERIFIED TO PASS 2025
Burr Oak Inc. was formed on July 1, 2019 when Walt Bernard purchased
the Big Motorbike organizes and provides motorbike tours along U.S.
coastal areas. Bern Motorbike. At the time, Big Rock's balance sheet
reported assets of $470,000 an stockholders equity was $170,000). The
fair value of Big Rock's assets is estimat assets is the Big Rock Motorbike
trade name with a fair value of $70,000 and a c value of $40,000. The
trade name has a remaining life of 10 years and can be re copyright has a
remaining life of 20 years.
Test warned that a ta
Instructions
(a)
Prepare the intangible assets section of Burr Oak Inc. at December
31, 20 included in Burr Oak Inc.'s income for the year ended
December 31, 2019
Schedule 1 - Computation of Value of Freedom Rock Bicycles Copyri
Cost of Copyright at date of
purchase Less Amortization of
Copyright for 2019*
Carrying Value of Copyright on December 31, 2019
* Amortization = $40, years x 6/12 year = $1000
Schedule 2 - Goodwill Measurement
Purchase price
Fair value of assets $ 540,000
Less Fair value of $ 300,000
liabilities Fair value of
net assets Value Assiged
to Goodwill
Schedule 3 - Computation of Value of Trade Name
Purchase price
Amortization of trade name for 2019*
Carrying Value of Trade Name on December 31, 2019
* No amortization for trade name since it is considered an indefinite life int
BURR OAK INC
Intangibles Section of Balance Sheet
43830
Tradename
Copyright
, Goodwill
Total Intangibles
(b)
Prepare the journal entry to record amortization expense for 2020. Prepar
, Oak Inc. at December 31, 2020. (No impairments are required to
be recor
Debit
Amortization Expense* $ 2,000
Accumulated Amortization - Copyright
* Amortization = $40,000/ 20 years = $2,000
(c)
At the end of 2020, Bernard is evaluating the results of the tour
business. online businesses, the Big Rock reporting unit has
been losing money. Its value of the Big Rock reporting unit is
$150,000. Bernard has collected th company's intangible assets
intangible assets:
Expected Cash
Flows
Intangible Asset (Undiscounted)
Trademark $ 50,000
Copyrights $ 26,000
Calculate impairment loss, if any, for each of the intangible assets.
Calculate the impairment loss:
Carrying value asset
Less Fair Value of Trade Name
Loss on Impairment
Is there an impairment?
*No amortization for trade name since it is considered an indefinite life int
Purchase Price
Accumulated Amortization - Copyright
Carrying value - Copyright
Fair Value of Assets
Result
Is there an impairment?
Calculate the impairment loss:
Carrying value
asset Fair value of
asset Loss on
Impairment
*Amortization = $40, years x 1.5 years = $3,000
Carrying value of
goodwill Fair value of
business unit Result
ANSWERS VERIFIED TO PASS 2025
Burr Oak Inc. was formed on July 1, 2019 when Walt Bernard purchased
the Big Motorbike organizes and provides motorbike tours along U.S.
coastal areas. Bern Motorbike. At the time, Big Rock's balance sheet
reported assets of $470,000 an stockholders equity was $170,000). The
fair value of Big Rock's assets is estimat assets is the Big Rock Motorbike
trade name with a fair value of $70,000 and a c value of $40,000. The
trade name has a remaining life of 10 years and can be re copyright has a
remaining life of 20 years.
Test warned that a ta
Instructions
(a)
Prepare the intangible assets section of Burr Oak Inc. at December
31, 20 included in Burr Oak Inc.'s income for the year ended
December 31, 2019
Schedule 1 - Computation of Value of Freedom Rock Bicycles Copyri
Cost of Copyright at date of
purchase Less Amortization of
Copyright for 2019*
Carrying Value of Copyright on December 31, 2019
* Amortization = $40, years x 6/12 year = $1000
Schedule 2 - Goodwill Measurement
Purchase price
Fair value of assets $ 540,000
Less Fair value of $ 300,000
liabilities Fair value of
net assets Value Assiged
to Goodwill
Schedule 3 - Computation of Value of Trade Name
Purchase price
Amortization of trade name for 2019*
Carrying Value of Trade Name on December 31, 2019
* No amortization for trade name since it is considered an indefinite life int
BURR OAK INC
Intangibles Section of Balance Sheet
43830
Tradename
Copyright
, Goodwill
Total Intangibles
(b)
Prepare the journal entry to record amortization expense for 2020. Prepar
, Oak Inc. at December 31, 2020. (No impairments are required to
be recor
Debit
Amortization Expense* $ 2,000
Accumulated Amortization - Copyright
* Amortization = $40,000/ 20 years = $2,000
(c)
At the end of 2020, Bernard is evaluating the results of the tour
business. online businesses, the Big Rock reporting unit has
been losing money. Its value of the Big Rock reporting unit is
$150,000. Bernard has collected th company's intangible assets
intangible assets:
Expected Cash
Flows
Intangible Asset (Undiscounted)
Trademark $ 50,000
Copyrights $ 26,000
Calculate impairment loss, if any, for each of the intangible assets.
Calculate the impairment loss:
Carrying value asset
Less Fair Value of Trade Name
Loss on Impairment
Is there an impairment?
*No amortization for trade name since it is considered an indefinite life int
Purchase Price
Accumulated Amortization - Copyright
Carrying value - Copyright
Fair Value of Assets
Result
Is there an impairment?
Calculate the impairment loss:
Carrying value
asset Fair value of
asset Loss on
Impairment
*Amortization = $40, years x 1.5 years = $3,000
Carrying value of
goodwill Fair value of
business unit Result
