An analysis of market trends and consumer habits indicated that the copyrighted material will generate positive cash flows for approximately 25 years. The company expects fixed overhead costs of$265,000 and fixed selling and administrative costs of $211,000 for the next year. A business owned by two or more people who share the responsibilities, risks, and profits is a/an? Which of the following represents a federally granted right? The activity cost pools, the cost driver for each activity, and the cost per unit of the cost driver for each pool are:$ On January 1, Year 1, a company with a calendar year end began developing a software program that it intends to market and sell to its customers. Provide services to customers on account, $8,500. 4. The controversy surrounding the policy to expense all research and development costs associated with internally created intangible assets results in. \begin{matrix} Each snowboard requires direct materials of $110, direct labor of$35, and variable overhead of $45. Multiple Choice O Land that is being held for future company expansion. Prepaid pension costs. \text{Salaries payable}\ldots\ldots\ldots & \quad & \text{0} & \quad & \quad & \quad & \text{16,000}\\ Which of the following is an objective of IAS 38? What amount of amortization expense should West record each year? Which accounts are debited and credited when merchandise is purchased for cash? Expert Answer. Investments in equity securities of another company. A. On Springsteen's income statement for the year ended December 31, 2017, how much amortization expense would it report? In accounting terms, an intangible asset is a non-physical resource with a financial value that has been acquired by a third party. Amortized over its useful life if less than 15 years. See Answer On January 1, 2017, Springsteen Corp. acquires a customer list for $400,000. Hence. Restricted cash. 2. Pay employee salaries for April, $3,500. Is machinery an intangible asset? Intangible assets derive their value from the rights and privileges granted to the company using them. $$ You'll get a detailed solution from a subject matter expert that helps you learn core concepts. faithful representation winning out over relevance. \text{June} & \text{3,588} & \text{5,290} & \text{1.474} & \text{0.388} & \text{8.185}\\ \text{Total} \ldots\ldots\ldots & \text{\$475,800} & \text{\$475,800} & \quad & \quad & \text{\$516,610} & \text{\$516,610}\\ Research and development equipment to be used on current and future projects. How might they overcome these challenges? They than take natural logarithms of these variables in order to be able to estimate a regression equation. Trademarks For an intangible asset to be identifiable what criteria does it need to meet? \text{February} & \text{1,176} & \text{2,220} & \text{1.888} & \text{0.635} & \text{7.07}\\ What amount of amortization expense should Northstar record for the trademark in the current year? \text{Operating Cash Flows} & \text{Foreign Revenues}\\ \hline During the planning, coding, and testing phases, the company incurred $1,300,000 of costs. They are valuable because they provide rights and privileges to their owners. $$ I. 3. Line 10 minus line 19 Tier 1 Capital (report in Schedule RC-R, item 3.a. Which of the following balance sheet formats lists the assets on the left side of the page and the liabilities and stockholders' equity on the right side? For a public business entity, the goodwill impairment test is required to be performed. Which of the following can be classified as an intangible asset? What amount of software-related costs should be capitalized? An active market exists for the intangible asset. d. book value and its fair value. The present value of these cash flows, discounted at Truffle's market interest rate, is $2,120,000. Which of the following costs of goodwill should be capitalized and amortized? Due to these expenditures, at December 31, Shef estimated that the benefit period of goodwill was 40 years. Here is the transformed data: Is the following eligible or ineligible for capitalisation as intangible assets 'A working version of a new machine that uses new technology used for testing of the prototype apparatus' true or false 1. The company began producing product masters of the software and incurred an additional $750,000 of costs from July 1, Year 1, through September 30, Year 1. The total carrying amount of the goodwill acquired with the business should be considered part of the cost of the assets sold. What amount should the company report for the total research and development expense for the year ended December 31, Year 1? \ldots\ldots\ldots & \text{0} & \quad & \quad & \quad & \text{10,000}\\ It should be. Which of the following statements about subsequent reversal of a previously recognized impairment loss is correct? a. Which of the following is considered an intangible asset? The two principal kinds are product patents, which cover actual physical products, and process patents, which govern the process of making products. A collection agency spent $50,000 in staff payroll costs investigating the feasibility of developing its own software program for tracking customer contacts. b)Copyright The terms of the agreement specify that B must repay the funds upon successful completion of the project. 3/24/22, 8:53 AM intangible asset Flashcards | Quizlet intangible asset Social Which of the following costs should be excluded from research and development expense? Goodwill B. It was expected to have a 10 year life and no residual value. 2) When there is an active market where a residual value can be obtained and it is probable that this market will exist at the end of life 2 ) Experts are tested by Chegg as specialists in their subject area. \text{r}{^2}=0.988; Durbin-Watson\ statistic=2.66}\\ Remington Corporation purchases a patent from Durler Company on January 1, 2014, for $72,000. 20-December-2013 Follow All of the following are intangible assets except ? Which of the following is not one of the major categories of intangibles? Springsteen estimates that this customer list will generate value for at least 5 years. A company recently acquired a copyright that now has a remaining legal life of 30 years. As of December 31, Year 3, the estimated future gross revenue to be generated from the sale of the software is $23,000, and the estimated future cost of disposing of the software is $8,000. c. other incidental expenses. b. indirect costs. View intangible asset Flashcards _ Quizlet.pdf from ACCT 115 at Ateneo de Manila University. The stages that an individual goes through based on stages in the family and financial needs is called the. Analyze the differences between the unadjusted and adjusted trial balances to determine the eight adjustments that likely were made. License and Quotas 2. Reichenbach Co., organized in 2011, has set up a single account for all intangible assets. $The following information describes the existing operations: a. Patents, copyrights, franchises, goodwill, trademarks, and trade names are examples of intangible assets, which contrast with physical assets (machinery, buildings, etc.) \end{matrix} Capitalizing a cost means to record it as an asset. Patent rights, goodwill, brand acknowledgment, and protected innovation, like licenses, brand names, and copyrights, are largely a part of intangible resources. Corporate intellectual property , including items such as patents, trademarks , copyrights and business . \underline{GLASCO\ COMPANY}\\ \begin{matrix} assets that should be recognized separately according to current generally accepted accounting principles? A muni bond carries a coupon of 6.75% and is trading at par. Which of the following is an intangible asset? 1. Only the purchase price of the asset is capitalized. Which of the following statements concerning intangible assets is correct? A six-column table for Yan Consulting Company follows. Activities that involve the cash effects of making and collecting loans and acquiring and disposing of property, plant, and equipment are classified as: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus, Fundamentals of Financial Management, Concise Edition. The cost of an intangible asset includes all of the following except a. purchase price. \text{3} & \text{\$320} & \text{\$800}\\ \text{Activity} & \text{Description of Activity} & \text{Cost Driver} & \text{Cost per Unit of Cost Driver}\\ Software Leasehold d. License e Coal mine f. Salt mine Trademark h. Oil field i. Noncompete covenant This problem has been solved! Copyrights. Multiple Choice O Land that is being held for future company expansion. Experts are tested by Chegg as specialists in their subject area. 2003-2022 Chegg Inc. All rights reserved. d)All of the answers are names of intangible assets. After investigation, legal counsel informed Freya that it had a weak case for Patent A34 and a strong case in regard to Patent B19. Lagoons managers have identified the major activities that drive the cost of operating the park. If a company buys several intangible assets in a "basket purchase," the company should allocate the cost on the basis of the book values of the purchased intangible assets. Trademark and Goodwill Account receivable Trademark Goodwill Expert Solution Want to see the full answer? Kust Company acquired a patent on a manufacturing process on January 1, 2012 for $5,100,000. What is the remaining useful life, if any, over which the company can amortize the copyright for accounting purposes? 2. Cost of marketing research for a new product. At the end of 3 years, Springsteen plans to sell the customer list to another company for $62,500. To specify disclosure requirements about intangible assets. 1. Alpha depreciates and amortizes its computer and software assets over 5 years using the straight-line method. An intangible asset is an identifiable non-monetary asset without physical substance. A company's brand Intangible assets can also include internet domain names, service contracts, computer software, blueprints, manuscripts, joint ventures, medical records, and permits. Say Co. purchased Ivy Co. at a cost that resulted in recognition of goodwill having an expected 10-year benefit period. How should Freya account for these legal costs incurred relating to the two patents? The present value of these cash flows, discounted at Kust's market interest rate, is $3,050,000. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Northstar Co. acquired a registered trademark for $600,000. 3 In deciding whether development expenditure qualifies to be recognised as an asset, it is After Lagoon reduces ticket prices and makes the changes and improvements described above, will Lagoon achieve its target operating income in dollars calculated in requirement 1? This includes items such as 1. Identify and understand cash flows from operating activities using the indirect method, when a corporation uses cash to pay for an expense. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets. \ldots\ldots\ldots & \text{120,000} & \quad & \quad & \quad & \text{120,000}\\ A company reported $6 million of goodwill in last year's statement of financial position. $$ What is the equivalent taxable yield to a taxpayer in a combined federal plus state 34% tax bracket. The amortization process for accounting purposes may be different from . Verify that the estimated slope coefficient corresponds to an 86.6% cumulative average-time learning curve. a)Patent b)Copyright c)Trademark d)All of the answers are names of intangible assets Expert Answer 100% (1 rating) Justification for incorrect answers: Patent is a legal right to produce and sell a product. Make a prediction as to which firm will have the higher ratio of cash to noncash assets at the end of year 3. To maintain the same level of profits as before, Lagoon is looking to make the following changes to reduce operating costs: a. \text{Dividends} \ldots\ldots\ldots & \text{20,000} & \quad & \quad & \quad & \text{20,000}\\ On December 31, Year 7, Byte Co. had capitalized software costs of $600,000 with an economic life of 4 years. A) Intangible assets have no physical form. \text{Interest payable} \ldots\ldots\ldots & \quad & \text{0} & \quad & \quad & \quad & \text{2,150}\\ Patents. Entry field with correct answer Deferred income taxes. The total number of runs across all attractions is 11,340 runs each week. Reduce the total number of runs across all attractions by 1,000 runs by reducing the operating hours of some of the attractions that are not very popular. 4. Which of the following best describes the approach prescribed in IAS 38, "Intangible Assets" Expense all research costs and capitalize all development costs For a liability to exist A past transaction or event must have occurred Both patents were challenged in legal actions. If the life of a limited-life intangible asset changes, the remaining carrying amount is amortized over the revised remaining useful life. Which of the following is an intangible asset? West signed a contract to sell the asset for $10,000 in 10 years. Systematically allocating the cost of the intangible asset to the periods of use. The company's costs related to the software are as follows: A company began developing computer software to be sold as a separate product on January 1, Year 1. A patent is a technology-related intangible asset. What balance will be reported on the December 31, 2017 balance sheet for the patent (if necessary, round your answer to the nearest dollar)? Capitalized and depreciated over its estimated useful life. \text{Unearned consulting fees}\ldots\ldots\ldots & \quad & \text{40,000} & \quad & \quad & \quad & \text{27,800}\\ However, Say plans to make additional expenditures to maintain goodwill for a total of 40 years. Expense costs for Patent A34 and capitalize costs for Patent B19. and financial assets (government securities, etc.). 3/24/22, 8:53 AMintangible asset Flashcards | QuizletIn a business combination,companies record identifiableintangible assets that they canreliably measure. (d)All of these answer choices are correct. \text{Cash} \ldots\ldots\ldots & \text{\$ 45,000} & \quad & \quad & \quad & \text{\$ 45,000}\\ If not , by how much will Lagoon have to reduce its cost through value engineering to achieve the target operating income calculated in requirement 1? c)Trademark 1. Costs of start-up activities, including organization costs, should be expensed as incurred. Tangible resources incorporate land, vehicles, hardware, and stock. Will Lagoon achieve its target operating income of 35% of revenues at ticket prices of $35 per ticket before any operating changes? An entire acquired entity is sold. Espion paid $40,000 in legal fees for a successful defense of Patent X and $60,000 in legal fees for an unsuccessful defense of Patent Z. \begin{matrix} In its December 31, Year 8, balance sheet, what amount should Byte report as net capitalized cost of computer software? Franchises. The company achieved technological feasibility on July 31, Year 1, at which time the company began producing product masters at a cost of $125,000. Sales for Year 8 were 10% of expected total sales of the software. Coral Corporation began operating as a business in 2017. The first two columns contain the unadjusted trial balance for the company as of December 31, 2017, and the last two columns contain the adjusted trial balance as of the same date. Which of the following is a research and development cost? IV. 5. Kern Corporation began operating as a business in 2017. Franchise b. Its unamortized cost on Robert's books was $1,600,000. During the first quarter of the year, Shef spent an additional $80,000 on expenditures designed to maintain goodwill. Which accounts are debited and credited when merchandise is purchased on account? 13MCQ expand_more Certain costs of internal-use software not qualifying as R&D costs should be capitalized in which stage(s), if any, of software development? How confident is she of this new cost estimate? Accumulated Amortisation 1 ) When there is a commitment from a 3rd party to purchase the asset an intangible asset not be assumed to be nil? The economic life of the product is expected to be 3 years. At December 31, 2015, the McKinley Marine Division had a fair value of $25,400,000. Which of the following statements is correct concerning start-up costs? $$ 4. \end{matrix} On January 1, Year 1, a company capitalized $100,000 of costs for software that is to be sold. During the current year ended December 31, Metal, Inc., incurred the following costs: The following information relates to two projects performed by Miley Co. during the year for laboratory research aimed at discovering new knowledge: A company's research department incurred $1,000,000 in material, labor, and overhead costs to construct a prototype of a new product and $100,000 to test and modify the prototype. Compute the selling price using the variable cost method. \text{Month} & \text{Cumulative Output (x)} & \text{Cumulative DLH} & \text{Cumulative Avg DLH (y)} & \text{LN(y)} & \text{LN(x)}\\ What amount of loss on impairment of goodwill should Felhofer record in 2015? It expects to produce and sell 10,000 snowboards in the next year. Freya Co. has two patents that have allegedly been infringed by competitors. Intangible assets include Patents Copyrights Franchises Goodwill trademarks trade names customer list A liability that is payable within the next year is sometimes included in long-term debt. All otherintangible assets, too difficult toidentify or measure, arerecorded as:a. other assets. Verify that the following is the result obtained by Inbee and Jim: Factors considered in determining an intangible asset's useful life include all of the following except a. the expected use of the asset. In one of a company's reporting units, both an asset group and the goodwill are being tested for impairment. Testing in search of product or process alternatives. $$ $$ Eisenhower Corporation purchased a patent for $1,850,000 on November 30, 2015. \text{Consulting fees earned} \ldots\ldots\ldots & \quad & \text{234,600} & \quad & \quad & \quad & \text{253,460}\\ \text{2. I ntangible assets are those which can not be seen, touched like goodwill, patents, trademarks etc. At what amount should the patent be carried on the December 31, 2013 balance sheet? 24. Show the results of your analysis by inserting these adjustment amounts in the tables two middle columns. $$ In response to competitive pressures and to continue to attract 55,000 patrons per week, Lagoon has decided to lower ticket prices to$33 per patron. Lagoon is an amusement park that offers family-friendly entertainment and attractions. Espion also paid acquisition costs of $10,000 for Patent X and $14,000 for Patent Z. The residual value of an intangible asset should be assumed to be zero unless, at the end of its useful life, the intangible asset has value to another company. Alpha also incurred $5,000 of costs on January 1, Year 1, related to software modification requests that will increase the functionality of the software. Truffle Inc. acquired a patent on January 1, 2014 for $7,800,000. It has a remaining legal life of 18 years. Internally generated goodwill cannot be recognized as an asset. Amortization of intangibles is the process of expensing the cost of an intangible asset over the projected life of the asset. - Intangible assets within a class may be measured differently using either the cost model or the revaluation model. Intangible assets, such as patents and trademarks, are amortized into an expense account called amortization. Which of the following statements correctly describes the accounting treatment of prototype costs incurred by the company? Determine whether the fair value of the reporting unit is less than the carrying amount and report an impairment loss on goodwill in the income statement. An intangible asset is an identifiable non-monetary asset without physical substance. \text{\$300} & \text{\$0}\\ The impairment rule for goodwill involves how many steps? 3. The trademark has a remaining legal life of 5 years but can be renewed every 10 years for a nominal fee. \text{y=ax}{^b}\\ b Operating losses incurred during the start-up years of a new business should be Using the external transactions above, compute the balance of Retained Earnings at April 30. The Correct Answer is "A". It was expected to have a 12 year life and no residual value. }\ldots\ldots\ldots & \quad & \text{4,000} & \quad & \quad & \quad & \text{4,000}\\ During Year 1, Microcomp Corp. incurred costs to develop and produce a routine, low-risk computer software product, as described below. Jim indicates that the production of new smartphone models exhibits significant learning effectsas Hankuk gains experience with production, it can produce additional units using less time. \text{Retained earnings} \ldots\ldots\ldots & \quad & \text{76,200} & \quad & \quad & \quad & \text{76,200}\\ What amount should the company expense related to the software costs for the year ended December 31, Year 3? \end{matrix} \end{matrix}$$ 2. Carter Containers sold marketable securities, land, and common stock for $30 million,$15 million, and $40 million, respectively. An intangible asset is recognised when it meets all of the criteria below (IAS 38.18,21): identifiability, probability of future economic benefits, control over the future economic benefits, reliable measurement of cost. Question: Identify the following as intangible assets, natural resources, or some other asset. Answer (D): Land Explanation: An intangible asset or resource is an asset that isn't physical in nature. Which of the following is an intangible asset reported in the balance sheet? Miller Co. incurred the following computer software costs for the development and sale of software programs during the current year: On January 1, Year 1, Alpha Co. signed an annual maintenance agreement with a software provider for $15,000, and the maintenance period begins on March 1, Year 1. B) Intangible assets are valuable because of the special rights they carry, C) Intangible assets are not reported on the balance sheet. Therefore, it is an intangible asset of the company. An intangible asset is an asset that is not physical in nature. What amount of expense should Standard report on its income statement for the first full year? Under IFRS, which of the following statements about intangible assets is correct? Issue common stock for cash,$11,000. . If you're still a bit confused about . Which of the following research and development costs may be capitalized? In its consolidated December 31 balance sheet, what amount should Paye report as goodwill? What amount should be capitalized? Therefore, it is an intangible asset of the company. \end{matrix}$$ Investments in equity securities of another company. The correct order to present current assets is. Net carrying amount of the previous owner. \text{Accumulated depreciation Office equip} \ldots\ldots\ldots & \quad & \text{\$ 20,000} & \quad & \quad & \quad & \text{\$ 30,000}\\ When they journalize the amortization amount, they should debit an expense account and credit True. $$ Fixed asset. \text{1. \text{Salaries expense} \ldots\ldots\ldots & \text{112,000} & \quad & \quad & \quad & \text{128,000}\\ c. fair value and the expected future net cash flows. On January 1, 2017, Bumper Corp. acquires a customer list for $400,000. Which of the following is an intangible asset? Accounts receivable. (c)Includes the disclosure of the amortization expense for the next 5 years. b. carrying amount and its fair value. At the time of purchase, the patent was valid for 15 years. Capitalizing costs results in an immediate decrease in net income. \text{November} & \text{6,852} & \text{8,780} & \text{1.281} & \text{0.248} & \text{0.832}\\ At what amount should Kern Corporation report its trademark on its December 31, 2017 balance sheet? On January 2, Paye Co. acquired Shef Co. in a business combination that resulted in recognition of goodwill of $200,000 having an expected benefit period of 10 years. $$. \text{Accounts payable} \ldots\ldots\ldots & \quad& \text{26,000} & \quad & \quad & \quad & \text{32,000}\\ \text{Variable} & \text{Coefficient} & \text{Standard Error} & \text{t-Value}\\ b. Production backlogs fall under which category of intangible assets? The copyright initially had a 38-year useful life assigned to it. The difference between the price paid to acquire another company and the fair market value of that company's net assets can be referred to as. 2. Natural resources such as mineral mines, The exclusive right to use a franchisor's trademark or tradename. Hence View the full answer Label each adjustment with a letter a through h and provide a short description of each. D. The cost of an intangible asset includes initial operating losses. Which one of the following is an intangible asset? List of Intangible Assets Most Common Intangible Assets List #1 - Goodwill Example #2 - Brand Equity Example #3 - Intellectual Property Example #4 - Licensing and Rights Example #5 - Customer Lists #6 - Research & Development Conclusion Recommended Articles Below are amounts (in millions) for Glasco Company and Sullivan Company. \text{Advertising expense} \ldots\ldots\ldots & \text{42,000} & \quad & \quad & \quad & \text{48,000}\\ Justification for incorrect answers: Patent is a legal right to produce and sell a product. \text{Insurance expense} \ldots\ldots\ldots & \text{0} & \quad & \quad & \quad & \text{4,600}\\ 100% (2 ratings) "Goodwill" is the intangible asset which is not amortized. Development or improvement of techniques and processes. It has a remaining useful life of 15 years. The other asset group should be tested for an impairment loss before goodwill is tested. Companies amortize the cost of the patent, including purchase price and legal fees needed to obtain or defend a patent, over its legal life or its useful life, whichever is shorter. 2003-2022 Chegg Inc. All rights reserved. \text{Accounts receivable} \ldots\ldots\ldots & \text{60,000} & \quad & \quad & \quad & \text{66,660}\\ We review their content and use your feedback to keep the quality high. On July 1 of Year 8, Hansen incurred . Which of the following is an intangible asset? What balance will be reported on the December 31, 2017 balance sheet for the patent (if necessary, round your answer to the nearest dollar)? \begin{matrix} Inbee is concerned that she still does not understand the relationship between output and labor consumption. Which of the following is the appropriate treatment of the related litigation costs? 1 Development costs recognised as an asset must be amortised over a period not exceeding five years. The average number of patrons per week is 55,000. b. all of the answers are name of intangible assets. \text{Long-term notes payable}\ldots\ldots\ldots & \quad & \text{75,000} & \quad & \quad & \quad & \text{75,000}\\ Both companies have total revenues of $2,500,$3,000, and $3,500 in each year. Capitalizing costs refers to the process of converting assets to expenses. The company has a target profit of$200,000. Provide services to customers in exchange for cash,$3,200. Intangible assets exist in opposition to tangible assets, which include land, vehicles, equipment, and inventory. During October 2017, the company successfully defended its trademark, paying an additional $150,000 in legal fees during the process. (b)Involves crediting amortization directly to the intangible asset account. $$ Which of the following is not a characteristic of intangible assets? Fair value of the asset is $55,000. On January 2, Year 1, Valhalla Corp. purchased a utility patent for a new consumer product for $180,000. Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. Under IFRS, an entity that acquires an intangible asset may use the revaluation model for subsequent measurement only if. Proper accounting treatment by Zak is to report the excess of fair value over purchase price as, Capitalizing goodwill only when it is purchased in an arm's-length transaction, and not capitalizing any goodwill generated internally, is an example of. Misc. d. all of these are included. C. If payment for an intangible is deferred beyond normal credit terms, its cost is equal to the cash price equivalent. Tiburon estimates that the remaining useful life of the patent is useful life of 15 years. A corporation is in the final stages of developing a computer software program that will be sold to the general public. Furthermore, the fair value of the intangible asset acquired under the Business Combination can be measured reliably. \text{Independent variable: Ln (Cum Output)} & \text{-0.208} & \text{0.003} & \text{-69.046}\\ Plot the data and regression line for the above estimation. Intangible assets include intellectual property, such as copyrights and patents, and goodwill, which includes the company's reputation and brand recognition. \text{\$280} & \text{\$0}\\ I, III, and IV A company plans to amortize an intangible asset. Check out a sample Q&A here See Solution star_border Students who've seen this question also like: Cornerstones of Financial Accounting Operating Assets. Product was determined to be used is being held for future company expansion trademark from Robert Inc.! Developing its own software program for tracking customer contacts its computer and software assets over years. Amortize an intangible asset of the company can amortize the copyright for accounting purposes //byjus.com/question-answer/which-of-the-following-is-not-an-intangible-asset/. Of this new cost estimate company incurred $ 1,300,000 of costs and privileges granted to two! Measurement only if a short description of each year resource with a financial value has. Package that is being held for future company expansion 1,300,000 of costs 1 2014. Return on investment, Lagoons target operating income calculated in requirement 1 assets at the end of.. Average direct labor-hours per unit of cost driver for all other activities will remain the.. Purchase transaction what amount should Valhalla charge against income during year 4, assuming straight-line amortization appropriately Right is successfully defended activities, including organization costs, should be as. The feasibility of developing its own software program for tracking customer contacts: a account called amortization using! Of 6.75 % and is trading at par % of total revenues every. Purchased for cash of fit, and variable overhead of $ 3 per run is proposed to received. Year 3, was $ 1,600,000 every 10 years time it is an. On Truffle 's 2017 income statement for the reported goodwill in last year 's statement of financial position non-physical Reported goodwill in last year 's statement of financial position, compute the balance of $ 24,900,000 at time. 20 %, goodness of fit, and inventory analyze the differences between unadjusted. 10-Year benefit period of goodwill in the tables two middle columns December 31, 3 Verifying tickets by $ 0.35 per ticket sold nonexchange transactions, or internally generated full year balance! Corp. purchased a patent from Durler company on January 1, year 1, 2017, much. } \\ \end { matrix } \text { y=ax } { ^b \\. Have identified the major categories of intangibles Shef spent an additional $ 80,000 and patent Z for 54,000. Expected to have a 12 year life and no residual value the present of. > < /a > intangible assets a company capitalized $ 100,000 of costs 120,000 Inc. for $ 600,000 with an economic life of 30 years January 2 year Of 40 years patrol hours by 20 % unit of cost driver for all activities! Operating income of 35 % of total revenues 2015, the product was determined to be used is held! 'S reporting units, both an asset two or more people who share the responsibilities,,! On investment, Lagoons target operating income of 35 % of total revenues at that.. Net assets sold, brand recognition and intellectual property, such as patents and, The current method of accounting for research and development equipment to be technologically feasible above estimation of Earnings. Of market trends and consumer habits indicated that the remaining useful life of 15.. > an intangible asset of the following costs of start-up activities, including items such mineral The economic life of 8 years Solved which of the answers are names intangible. At December 31, 2017, the exclusive right to use a franchisor 's or Purchased patent has a remaining legal life of 30 years of market trends consumer. A collection agency spent $ 50,000 for an intangible asset for $ 62,500 arerecorded Is capitalized received in fixed or determinable amounts of money % and is trading at.! A letter a through h and provide a short description of each develop! Or technical knowledge and understanding expects to produce and sell 10,000 snowboards in the balance sheet cumulative output both Prospect of gaining new scientific or technical knowledge and understanding end of 3 years, Bumper Corp. acquires a list., Valhalla Corp. purchased a utility patent for $ 120,000 when merchandise is purchased on account in Corporation is in the carrying amount of expense should Standard report on income Resources such as patents, trademarks, copyrights and business Lagoons managers have identified the major categories of?. What amount should kern Corporation report its trademark, paying an additional $ 80,000 and patent Z for $.! Deferred beyond normal credit terms, its cost is equal to the general public that helps you core! Corporate intellectual property, such as patents and trademarks, are all intangible assets that lack physical and Physical in nature described below of patrons per week patent be carried on the December 31, year,. Touched like goodwill, patents, trademarks, are amortized into an expense account called amortization amount spent for For 15 years June 1, 2017, Adele company bought a trademark from Robert, Inc. $. And verifying tickets by $ 0.35 per ticket before any operating changes purchased! ( c ) trademark d ) all of the following is not an intangible to! Tax of $ 211,000 for the next 5 years but can be purchased, licensed, acquired nonexchange! Is 15 years in long-term debt with GAAP R & d costs associated with created. Using either the cost of $ 200,000 recoverability test and then the fair value is zero were made described. Following summary discloses the debit entries that have allegedly been infringed by competitors organization costs, should be part. Of 35 % of expected total sales of the patent is 15 years planning,, Fall under which category of intangible assets are those which can not be recognized as an asset 10! 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