Homeworksolution-ch.12

Homeworksolution-ch.12 - EXERCISE 12-2 (10-15 minutes) The...

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The following items would be classified as intangible assets: Cable Television Franchises Customer Lists Music Copyrights Covenants Not To Compete Goodwill* Brand Names Film Contract Rights Organization Cost An intangible for customer lists usually results from a company purchasing a list form another party. If the list is created internally and costs can be specifically identified with creating the list internally, these costs would be classified as an intangible asset. A covenant not to compete may arise when a company pays another company a fee to insure that the company does not compete in a given area. Cash, accounts receivable, notes receivable, and prepaid expenses would be classified as current assets. Property, plant, and equipment, and land would be classified as non-current assets in the tangible property, plant, and equipment section. Leasehold improvements are generally shown in the tangible property, plant, and equipment section, although some accountants classify them as intangible assets. The rationale for intangible asset treatment is that the improvements revert to the lessor at the end of the lease and therefore are more of a right than a tangible asset. Investments in affiliated companies would be classified as part of the investments section of the balance sheet. Research costs and the annual franchise fee would be classified
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This note was uploaded on 10/18/2010 for the course BUS ACC415 taught by Professor Bibijohn during the Spring '09 term at Seneca.

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Homeworksolution-ch.12 - EXERCISE 12-2 (10-15 minutes) The...

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