Valix Finacc vol 1 Problem 20-30

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 20 Problem 20-30

1.  Present value of indefinite cash flows (200,000 / 10%)                                            2,000,000

     Trademark                                                                                                              6,000,000

     Impairment loss                                                                                                     (4,000,000)

     Present value of cash flows from cash generating unit (9,000,000 x 8.51)          76,590,000

     Net assets including goodwill at carrying amount                                               80,000,000

     Impairment loss                                                                                                   (  3,410,000)

2.  Impairment loss                                                                              7,410,000

            Trademark                                                                                                       4,000,000

            Goodwill                                                                                                         3,410,000