Loren Company's Balance Sheet Shows a Trade Name Acquired as Part

Multiple Choice

Loren Company's balance sheet shows a trade name acquired as part of a business combination with a carrying value of $30 million.The trade name has an indefinite life and therefore Loren does not amortize it.Negative publicity regarding the product carrying the trade name has reduced its fair value to $24 million and its value in use to $22 million.The entry is as follows:

A) Loss on Impairment ...................................8,000,000
Trade Name ..............................................8,000,000

B) Loss on Impairment ...................................6,000,000
Trade Name ..............................................6,000,000

C) Loss on Impairment ...................................4,000,000
Trade Name ..............................................4,000,000

D) Trade Name ........................................6,000,000
Loss on Impairment ........................................6,000,000

E) Trade Name ........................................8,000,000
Loss on Impairment ........................................8,000,000