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Cafe Italiano pays $70,000 for the trademark rights to a line of specialty sandwiches. After several years, sales for this line of specialty sandwiches are disappointing, and management estimates the total
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44 votes
44 votes
Cafe Italiano pays $70,000 for the trademark rights to a line of specialty sandwiches. After several years, sales for this line of specialty sandwiches are disappointing, and management estimates the total future cash flows from sales will be only $40,000. The estimated fair value of the trademark is now $20,000. What is the amount of the impairment loss

User Cardmagik
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1 Answer

14 votes
14 votes

Answer:

the amount of the impairment loss is $50,000

Step-by-step explanation:

The computation of the amount of the impairment loss is shown below:

Impairment loss = Purchase price of trade marks - Estimated fair value

= $70,000 - $20,000

= $50,000

Hence, the amount of the impairment loss is $50,000

The same should be considered and relevant

User Aaron Krauss
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