AE12-3 - 79,880 Total intangible assets $102,094 Organization costs $28,471 should be expensed Discount on bonds payable $30,958 should be reported

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AE12-3 Langrova Inc. has the following amounts included in its general ledger at December 31, 2010. Organization costs $28,471 Trademarks 22,214 Discount on bonds payable 30,958 Deposits with advertising agency for ads to promote goodwill of company 13,635 Excess of cost over fair value of net identifiable assets of acquired subsidiary 79,880 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 87,804 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 78,328 On the basis of the information above, compute the total amount to be reported by Langrova for intangible assets on its balance sheet at December 31, 2010. Equipment has alternative future use. $ 102,094 AE12-3 Trademarks $22,214 Excess of cost over fair value of net identifiable assets of acquired subsidiary (goodwill)
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Unformatted text preview: 79,880 Total intangible assets $102,094 Organization costs, $28,471, should be expensed. Discount on bonds payable, $30,958, should be reported as a contra account to bonds payable in the long-term liabilities section. Deposits with advertising agency for ads to promote goodwill of company, $13,635, should be reported either as an expense or as prepaid advertising in the current assets section. Advertising costs in general are expensed when incurred or when first used. Cost of equipment acquired for research and development projects, $87,804, should be reported with property, plant, and equipment, because the equipment has an alternative use. Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years, $78,328, should be classified as research and development expense on the income statement....
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This note was uploaded on 11/30/2011 for the course ACC 101 taught by Professor B during the Spring '09 term at CUNY Baruch.

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