(Answered) Question - at the beginning of year 1 sports gear inc sgi

Accounting

Question - At the beginning of Year 1, Sports Gear Inc. (SGI) acquired a college apparel license at a cost of $28,000,000, excluding legal fees of $1,600,000 and registration fees of $400,000. The company estimated that the license would have a useful (legal) life of 15 years. For Question 3, assume that the fair value of the license at the end of Year 1, Year 2, and Year 3 is $26,600,000, $26,300,000, and $23,850,000, respectively.

Question: What amount will the company report as the carrying value of the license asset at the end of Year 2 under US GAAP?

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