ch12_sol - Name: Solution Date: Instructor: Course:...

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f7f8505e39106437fcb7f881fe478315e3671618.xlsx, Exercise 12-3 Solution, Page 1 of 8, 03/29/2012, 01:32:23 Name: Solution Date: Instructor: Course: Organization costs $24,000 Trademarks $20,000 Discount on bonds payable $35,000 $10,000 $75,000 $90,000 $70,000 Instructions: Trademarks $20,000 $75,000 Total intangible assets $95,000 Intermediate Accounting , 14 th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse E12-3 (Classification Issues—Intangible Asset) Langrova Inc. has the following amounts included in its general ledger at December 31, 2012. Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years (a) 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, 2012. Equipment has alternative future use. Excess of cost over fair value of net assets of acquired subsidiary (goodwill) (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. Organization costs, $24,000, should be expensed. Discount on bonds payable, $35,000, 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, $10,000, 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, $90,000, 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, $70,000, should be classified as research and development expense on the income statement.
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f7f8505e39106437fcb7f881fe478315e3671618.xlsx, Exercise 12-3, Page 2 of 8, 03/29/2012, 01:32:23 Name: Date: Instructor: Course: Organization costs $24,000 Trademarks $20,000 Discount on bonds payable $35,000 $10,000 $75,000 $90,000 $70,000 Instructions: Text Title Amount Text Title Amount Text Title Formula Enter text answer as appropriate here. Enter text answer as appropriate here. Enter text answer as appropriate here. Enter text answer as appropriate here. Intermediate Accounting , 14 th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse E12-3 (Classification Issues—Intangible Asset) Langrova Inc. has the following amounts included in its general ledger at December 31, 2012. Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years (a)
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ch12_sol - Name: Solution Date: Instructor: Course:...

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