100 points Danube, Toggle, and ConnectOn rely on various intangible assets to op

Question

100 points Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost of these assets using the straight-ine method over the folowing average estimated useful lives (in years), as reported in their 2013 annual reports cemaren ear ahrp 2 average Connecton Type of Intangible Asset Danube.com 3.5 Trade Names 4.5 32 1.1 3.0 Customer Relationships 2.1 Assume each company spent $806.000 at the g of the cument year for additiona Technology Because oh its proprietary nature, the technology end of its estimated ife is estmaced to have no residual value at the Required Calculate the impact (direction and amounti that the amorization of such expenditures would have on each companys Income from Operations in the currert year (Do not round intermedi ate caloulations Decreases should be indicated by a minus sign.) Effect on Company Income from Danube Toggle Hints References Book & Resources

Explanation / Answer

Working:

Amortization:

Danube: $805000/3.5 years = $230000

Toggle: $805000/7.0 years = $115000

ConnectOn: $805000/2.5 years = $322000

Company Effect on Income from Operations Danube $-230,000 Toggle $-115,000 ConnectOn $-322,000

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