For example if a firm purchases a patent from another

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purchased from an outside source. For example, if a firm purchases a patent from another company, the cost is shown as an asset. However, if a firm does research that results in a patent, those research costs are included in R&D expense and an asset is only recognized for the legal and registration fees to obtain the patent. Some, but not all, intangibles are systematically amortized; the amortization of intangibles works in the same way that depreciation expense works for PPE. For example, if a patent is purchased for $100 and is expected to last for 4 years, the $25 in amortization expense is recognized each period and the patent asset is reduced by $25 each year. Goodwill – purchase price of an acquired company minus the market value of their identifiable assets minus liabilities. The market values of both tangible and intangible assets are considered in the calculation of identifiable assets. Goodwill is ONLY recognized when one company purchases another company at a premium for things like future potential, market power, and quality of workforce that are not considered “identifiable assets.” Find the following asset dollar amounts for TI for the most recent year 1. What is the original cost of land, equipment, and buildings? $ 4789 Million 2. What is the amount of the equipment and buildings that has already been depreciated? $2125 million 3. What amount of cash is expected to be collected from customers in the next year? $1278 Million 4. What amount has been invested in debt and equity securities of other entities expected to be realized in cash within the next year? $2813 million 5. What amount has been invested in debt and equity securities of other entities that they expect to realize in cash sometime after the next year? $268 million 6. What is the aggregate amount of raw materials, work-in-process and finished goods available for sale to customers? $126+$1089+$742 = $1957 million 2
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Riffe –ACCT 6201 –Session 2 – Fall 2018 7. What is the amount paid for acquisitions of other firms above the fair value of those firms’ assets minus liabilities? $4362 million 8. What is the value of other assets (besides (7)) that represent a legal claim, but do not have physical substance? $1074 million 9. What is the amount of cash paid upfront for future expenses? $1030 million Liability Account Names Accounts payable – amount owed to suppliers for inventory or other goods or services purchased on credit. Other payables or accrued expenses – amounts owed for items that have already been recognized as an expense on the income statement like interest, taxes, salaries, and rent. Short-term loans payable or notes payable –obligations formalized with a note or lending agreement that specify interest and payment terms and are due within the next year. Current maturities of long-term debt- the portion of long-term debt expected to be paid within the next year.
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