Jung IncOwns a Patent for Which It Paid $66 Million

question 44

Multiple Choice

Jung Inc.owns a patent for which it paid $66 million.At the end of 2016,it had accumulated amortization on the patent of $16 million.Due to adverse economic conditions,Jung's management determined that it should assess whether an impairment loss should be recognized for the patent.The estimated undiscounted future cash flows to be provided by the patent total $43 million,and the patent's fair value at that point is $35 million.Under these circumstances,Lester:

• A)Would record no impairment loss on the patent.
• B)Would record a $7 million impairment loss on the patent.
• C)Would record a $15 million impairment loss on the patent.
• D)Would record a $31 million impairment loss on the patent.

---

Definitions:

Nutritional Formula

A specially prepared liquid or powder designed to provide necessary nutrients for dietary management.

Formula Ratio

A mathematical relationship or proportion between two or more numbers or quantities, often used in calculations for medication dosages.

Active Ingredient

The component of a medication or substance that is biologically active, responsible for its effects.

Solution Ratio

The proportion of solute to solvent in a solution, often important in the preparation of medical and chemical solutions.