Answer:
a. Their cost would be $402 million
b. Their accumulated amortization at the time of disposal would be $16 million
c. The loss on disposal of trademarks would be $383 million
Explanation:
a. In order to calculate their cost we would have to make the following calculation:
cost of disposed trademarks= cost of trademark+trademark acquired-trademark at the end
cost of disposed trademarks=$2,016 million + $89 million -$ 1,703
cost of disposed trademarks=$402 million
b. In order to calculate their accumulated amortization at the time of disposal we would have to make the following calculation:
accumulated amortization at the time of disposal=amortization accumulated at the beginning+ amortization expense during the year-ammortization accumulated at the end
accumulated amortization at the time of disposal=$20+$3-$7
accumulated amortization at the time of disposal=$16 million
c. In order to calculate the gain (loss) on disposal of trademarks we would have to make the following calculation:
gain (loss) on disposal of trademarks= cost of trademark disposed-amortization expense during the year-proceeds from sale of trademark
gain (loss) on disposal of trademarks=$402-$16-$3
loss on disposal of trademarks=$383 million
