Intermediate Accounting
E12-16
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.
1. Investment in a subsidiary company. …. LT Investment in Balance Sheet
2. Timberland. ……………………………………..… PPE in Balance Sheet
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage. …………R& D Expense in Income Statement 4. Lease prepayment (6 months' rent paid in advance). …………………………………………………. Prepaid Rent in Balance Sheet
5. Cost of equipment obtained. …………………………………….. PPE in Balance Sheet
6. Cost of searching for applications of new research findings. ……………………………………. R& D Expense in Income Statement
7. Costs incurred in the formation of a corporation. …………………………………………………. Organization Fees in Income Statement 8. Operating losses incurred in the startup of a business. ……………………………………. Operating Loss in Income Statement
9. Training costs incurred in startup of new operation. …………………………………………………. Training Expense in Income Statement
10. Purchase cost of a franchise. ……………………………. Intangible Assets in Balance Sheet
11. Goodwill generated internally. ………………………….…. No Recording
12. Cost of testing in search for product alternatives. …………………………………………………. R& D Expense in Income Statement
13. Goodwill acquired in the purchase of a business. …………………………………………………. Intangible Assets in Balance Sheet
14. Cost of developing a patent. R& D Expense in Income Statement
15. Cost of purchasing a patent from an inventor. …………………………………………………. Intangible Assets in Balance Sheet
16. Legal costs incurred in securing a patent. …………………………………………………. Intangible Assets in Balance Sheet
17. Unrecovered costs of a successful legal suit to protect the patent. ………………………. Intangible Assets in Balance Sheet
18. Cost of conceptual formulation of possible product alternatives. ………………………. R& D Expense in Income Statement
19. Cost of
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.
1. Investment in a subsidiary company. …. LT Investment in Balance Sheet
2. Timberland. ……………………………………..… PPE in Balance Sheet
3. Cost of engineering activity required to advance the design of a product to the manufacturing stage. …………R& D Expense in Income Statement 4. Lease prepayment (6 months' rent paid in advance). …………………………………………………. Prepaid Rent in Balance Sheet
5. Cost of equipment obtained. …………………………………….. PPE in Balance Sheet
6. Cost of searching for applications of new research findings. ……………………………………. R& D Expense in Income Statement
7. Costs incurred in the formation of a corporation. …………………………………………………. Organization Fees in Income Statement 8. Operating losses incurred in the startup of a business. ……………………………………. Operating Loss in Income Statement
9. Training costs incurred in startup of new operation. …………………………………………………. Training Expense in Income Statement
10. Purchase cost of a franchise. ……………………………. Intangible Assets in Balance Sheet
11. Goodwill generated internally. ………………………….…. No Recording
12. Cost of testing in search for product alternatives. …………………………………………………. R& D Expense in Income Statement
13. Goodwill acquired in the purchase of a business. …………………………………………………. Intangible Assets in Balance Sheet
14. Cost of developing a patent. R& D Expense in Income Statement
15. Cost of purchasing a patent from an inventor. …………………………………………………. Intangible Assets in Balance Sheet
16. Legal costs incurred in securing a patent. …………………………………………………. Intangible Assets in Balance Sheet
17. Unrecovered costs of a successful legal suit to protect the patent. ………………………. Intangible Assets in Balance Sheet
18. Cost of conceptual formulation of possible product alternatives. ………………………. R& D Expense in Income Statement
19. Cost of