acct 551
Assignment 1
E12-1 (Classification Issues—Intangibles) Presented below is a list of items that could be included in the intangible assets section of the balance sheet.
Instructions
(a) Indicate which items on the list above would generally be reported as intangible assets in the balance sheet. 13. Goodwill acquired in the purchase of a business.
15. Cost of purchasing a patent from an inventor
16. Legal costs incurred in securing a patent.
17. Unrecovered costs of a successful legal suit to protect the patent.
23. Cost of purchasing a trademark
19. Cost of purchasing a copyright.
10. Purchase cost of a franchise.
(b) Indicate how, if at all, the items not reportable as intangible assets would be reported in the financial statements.
1. Investment in a subsidiary company. – long term investments
2. Timberland. - PPE
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage. – research and development
4. Lease prepayment (6 months’ rent paid in advance). – prepaid rent
5. Cost of equipment obtained. - PPE
6. Cost of searching for applications of new research findings. – R&D expense
7. Costs incurred in the formation of a corporation. - expense
8. Operating losses incurred in the start-up of a business. – operating loss
9. Training costs incurred in start-up of new operation. - expense
11. Goodwill generated internally. – not recorded
12. Cost of testing in search for product alternatives. – R&D expense
14. Cost of developing a patent. – R&D expense
18. Cost of conceptual formulation of possible product alternatives.
20. Research and development costs. – R&D expense
21. Long-term receivables. – long term investment
22. Cost of developing a trademark. - expense
(Kieso, 02/201
1, p. 698)
E12-4 (Intangible Amortization) Presented below is selected information for Palmiero Company.
1. Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being
E12-1 (Classification Issues—Intangibles) Presented below is a list of items that could be included in the intangible assets section of the balance sheet.
Instructions
(a) Indicate which items on the list above would generally be reported as intangible assets in the balance sheet. 13. Goodwill acquired in the purchase of a business.
15. Cost of purchasing a patent from an inventor
16. Legal costs incurred in securing a patent.
17. Unrecovered costs of a successful legal suit to protect the patent.
23. Cost of purchasing a trademark
19. Cost of purchasing a copyright.
10. Purchase cost of a franchise.
(b) Indicate how, if at all, the items not reportable as intangible assets would be reported in the financial statements.
1. Investment in a subsidiary company. – long term investments
2. Timberland. - PPE
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage. – research and development
4. Lease prepayment (6 months’ rent paid in advance). – prepaid rent
5. Cost of equipment obtained. - PPE
6. Cost of searching for applications of new research findings. – R&D expense
7. Costs incurred in the formation of a corporation. - expense
8. Operating losses incurred in the start-up of a business. – operating loss
9. Training costs incurred in start-up of new operation. - expense
11. Goodwill generated internally. – not recorded
12. Cost of testing in search for product alternatives. – R&D expense
14. Cost of developing a patent. – R&D expense
18. Cost of conceptual formulation of possible product alternatives.
20. Research and development costs. – R&D expense
21. Long-term receivables. – long term investment
22. Cost of developing a trademark. - expense
(Kieso, 02/201
1, p. 698)
E12-4 (Intangible Amortization) Presented below is selected information for Palmiero Company.
1. Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being