ACCT_2000_Exam_2_notes[1]

ACCT_2000_Exam_2_notes[1] - Intangible Assets 1) Patents 2)...

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Intangible Assets 1) Patents 2) Copyrights 3) Goodwill – accounting Concept Recorded only ehwn one company buys another company, and purchase price > fair market value of NET Assets Purchase price = $2.5 million Assets = $3million value Liability = $1 million Net Assets = $2 million Goodwill = $500,000 UNIDENTIFIED ASSET Intangible Assets and Amortization Patents – No Physical substance Copyrights –  Long Lives Goodwill – Used in Daily Activities Intangibles must be amortized Amortization ~ Depreciation Straight Line Amortization = cost – salvage value (usually zero)
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Amortization Period Where Amortization Period = useful life or legal life, whichever is less Goodwill = Purchase Price – Fair Market Value of Net Assets Patent = $60,000 $60,000 – 0 = $6,000 Legal Life = 20 years 10 years year Useful life = 10 years Ch.7 – Liabilities Current Liabilities – those liabilities that mature within 12 months of the balance sheet date. 12/31/07 B/S Date – so any liabilities maturing by 12/31/08
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ACCT_2000_Exam_2_notes[1] - Intangible Assets 1) Patents 2)...

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