Compute for the Impairment loss for 2020/ STARK INDUSTRIES reports the following patents on its December 31, 2019 statement of financialposition.Useful Life (at date ofacquisition)17 years10 years4 yearsInitial CostDate of AcquisitionMarch 1, 2016July 1, 2017September 1, 2018Patent A1,224,000.00Patent B450,000.00Patent C432,000.00The following events occurred during the year ended December 31, 2020.a. Research and development costs of P 737,100 were incurred during the year. These costswere incurred prior to projects achieving economic viability.b. Patent D was purchased on July 1 for P 855,000. It has a remaining life 9% years.c. A possible impairment of Patent B's value may have occurred at December 31, 2020. This isdue to a significant reduction in the demands for certain products protected by Patent B.The company's controller estimates the following future cash flows from Patent B.December 31, 202160,000.00December 31, 2022December 31, 202360,000.0060,000.00The appropriate discount rate to be used for these cash flows is 8%. (Round of PV factors to 4decimal places)

An impairment loss is the amount by which an asset's or cash-generating unit's carrying value…

INDUSTRIES reports the following patents on its December 31, 2019 statement of financial Useful Life (at date of acquisition) 17 years 10 years 4 years Initial Cost Date of Acquisition March 1, 2016 July 1, 2017 September 1, 2018 1,224,000.00 B 450,000.00 432,000.00

INDUSTRIES reports the following patents on its December 31, 2019 statement of financial Useful Life (at date of acquisition) 17 years 10 years 4 years Initial Cost Date of Acquisition March 1, 2016 July 1, 2017 September 1, 2018 1,224,000.00 B 450,000.00 432,000.00

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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