Chapter 12 - graded homework - Summer 2011

Chapter 12 - graded homework - Summer 2011 - CHAPTER 12...

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CHAPTER 12 HOMEWORK EXERCISE 12-6 Patents .................................................................... 380,000 Goodwill .................................................................. 360,000 Franchise ................................................................ 450,000 Copyright ................................................................ 156,000 Research and Development Expense ................. 215,000 Intangible Assets .......................................... 1,561,000 Amortization Expense ........................................... 79,250 Patents ($380,000/8) ..................................... 47,500 Franchise ($450,000/10 X 6/12) ................... 22,500 Copyright ($156,000/5 X 5/12) ..................... 13,000 Balance of Intangible Assets as of December 31, 2010 Patents = $380,000 – $47,500 = $332,500 Goodwill = $360,000 (no amortization) Franchise = $450,000 – $22,500 = $427,500 Copyright = $156,000 – $13,000 = $143,000 EXERCISE 12-12 Net assets of Terrell as reported $225,000 Adjustments to fair value Increase in land value 50,000 Decrease in equipment value (5,000 ) 45,000 Net assets of Zweifel at fair value 270,000 Selling price 380,000 Amount of goodwill to be recorded $110,000
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The journal entry to record this transaction is as follows: Cash ............................................................................... 100,000 Land ............................................................................... 120,000 Building .......................................................................... 200,000 Equipment ..................................................................... 170,000 Copyright ....................................................................... 30,000 Goodwill ......................................................................... 110,000 Accounts Payable ............................................... 50,000 Long-term Notes Payable
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