Iconix Brand Group owns and markets various brands and trademarks, including Joe Boxer, London Fog, Ocean Pacific, Ecko Unltd., Umbro, Ed Hardy, Lee Cooper, Buffalo, and Peanuts. The company’s financial statements for the year ended December 31, 2015, indicate the following totals for these trademarks (in millions): 2015 2014 Trademarks (at cost) $ 1,703 $ 2,016 Accumulated Amortization 7 20 Trademarks, net 1,696 1,996 During 2015, Iconix acquired the Strawberry Shortcake and Pony trademarks at a cost of $89 million, recorded $3 million of trademark amortization for the year, and disposed of trademarks for proceeds of $3 million cash. Assume none of the trademarks were judged to be impaired during the year. Required: Based on the information given, determine the following for trademarks disposed of during 2015: (a) their cost, (b) their accumulated amortization at the time of disposal, and (c) the gain (loss) on disposal of trademarks. (

a. Their cost would be $402 million

b. Their accumulated amortization at the time of disposal would be $16 million

c. The loss on disposal of trademarks would be $383 million

Explanation:

a. In order to calculate their cost we would have to make the following calculation:

cost of disposed trademarks= cost of trademark+trademark acquired-trademark at the end

cost of disposed trademarks=$2,016 million + $89 million -$ 1,703

cost of disposed trademarks=$402 million

b. In order to calculate their accumulated amortization at the time of disposal we would have to make the following calculation:

accumulated amortization at the time of disposal=amortization accumulated at the beginning+ amortization expense during the year-ammortization accumulated at the end

accumulated amortization at the time of disposal=$20+$3-$7

accumulated amortization at the time of disposal=$16 million

c. In order to calculate the gain (loss) on disposal of trademarks we would have to make the following calculation:

gain (loss) on disposal of trademarks= cost of trademark disposed-amortization expense during the year-proceeds from sale of trademark

gain (loss) on disposal of trademarks=$402-$16-$3

loss on disposal of trademarks=$383 million

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answer; 33,000;