HW_6_intangibles with solutions

HW_6_intangibles with solutions - Homework#6 Intangibles(Ch...

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Homework #6: Intangibles (Ch 12), due on March 17. Problem 1: On September 30, 2011, Morgan, Inc. acquired all of the outstanding common stock of Pathways, Inc. for $100 million. In addition to tangible assets, Morgan recorded the following assets as a result of the acquisition: Morgan's policy is to amortize intangible assets using the straight-line method, no residual value, and a 6-year useful life. Required: What is the total amount of expenses that would appear in Morgan's income statement for the year ended December 31, 2011, related to these items? Solution to Problem 1: Expenses for the year include: Goodwill is not amortized. In-process research and development is not amortized. Note: any time a company buys another, it values the tangible and intangible assets acquired at fair value. When the acquired technology is considered “developed,” the acquirer capitalize its fair value (record as an asset) and amortize that amount over its useful life (i.e., like a limited-life intangible asset).
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This note was uploaded on 02/22/2012 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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HW_6_intangibles with solutions - Homework#6 Intangibles(Ch...

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