Orbit IncPurchased Planet Co $\quad$ Patent $10,000
B)?Goodwill $90,000 $\quad$

question 30

Multiple Choice

Orbit Inc.purchased Planet Co.on January 1, 2015.At that time an existing patent having a 5-year estimated life was assigned a provisional value of $10,000 and goodwill was assigned a value of $100,000.By the end of fiscal year 2015, better information was available that indicated the fair value of the patent was $20,000.How should intangible assets be reported at the beginning of fiscal year 2016??

• A)?Goodwill $100,000 \(\quad \)Patent $10,000
• B)?Goodwill $90,000 \(\quad \)\(\quad \)Patent $16,000
• C)?Goodwill $84,000 \(\quad \)\(\quad \)Patent $16,000
• D)?Goodwill $90,000 \(\quad \)\(\quad \)Patent $20,000

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Definitions:

Political Corruption

The unlawful misdirection of government resources, or actions that occur when government officials abuse their entrusted powers for personal gain.

Governmental Resources

Resources managed or owned by the government, including financial, natural, and human resources, used to provide public services.

Personal Gain

Refers to the increase in wealth, status, or beneficial outcomes for an individual, often viewed in the context of motives or outcomes of actions.

Adverse Selection

A situation where asymmetric information leads buyers or sellers to make counterproductive selections, commonly seen in insurance markets.