UR Company purchased a customer database and a formula for a new fuel substitute for diesel fuel for a total of $100,000. UR Company uses the expected cash flow approach for estimating the fair value of these two intangibles. The appropriate interest rate is 5%. The potential future cash flows from the two intangibles, and their associated probabilities, are as follows:
Customer Database:
Formula:
Prepare the journal entry necessary to record the purchase of the two intangibles.
Definitions:
National Saving
The total amount of savings generated within a country, typically calculated as the sum of private and public savings after accounting for investments and budget deficits.
Interest Rate
The percentage of a loan amount charged by the lender to the borrower for the use of assets, usually expressed as an annual percentage rate.
Net Capital Outflow
A contrast in the buying of foreign assets by residents of a country and the acquisition of its assets by non-residents.
NCO Curve
A hypothetical graphical representation that could relate to issues in international economics or capital flows, but requires clearer context for an accurate definition.
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