Amortization expense 3750 patents 3750 cost 60000

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Amortization Expense 3,750 Patents 3,750 Cost $60,000 Useful life ÷ 8 Annual expense $ 7,500 6 months x 6/12 Amortization $ 3,750 Dec. 31 TYPES OF INTANGIBLES
Expenditures that may lead to patents, copyrights, new processes, and new products. All R&D costs are expensed when incurred . Research and Development Costs ▼ HELPFUL HINT Research and development costs are not intangible costs, but because these expenditures may lead to patents and copyrights, we discuss them in this section. TYPES OF INTANGIBLES
Copyrights Give the owner the exclusive right to reproduce and sell an artistic or published work. Granted for the life of the creator plus 70 years. Capitalize costs of acquiring and defending it. Amortized to expense over useful life. TYPES OF INTANGIBLES
Trademarks and Trade Names Word, phrase, jingle, or symbol that distinguishes or identifies a particular enterprise or product. Wheaties, Monopoly, Sunkist, Kleenex, Coca-Cola, Big Mac, and Jeep. Legal protection for indefinite number of 20 year renewal periods . Capitalize acquisition costs. No amortization. TYPES OF INTANGIBLES
Goodwill Includes exceptional management, desirable location, good customer relations, skilled employees, high-quality products, etc. Only recorded when an entire business is purchased. Goodwill is recorded as the excess of ... purchase price over the FMV of the identifiable net assets acquired . Internally created goodwill should not be capitalized. TYPES OF INTANGIBLES
FRANCHISES A franchise is the right received (usually purchased) by a business or individual to perform certain functions or sell certain products or services. The cost of a franchise includes expenditures made to purchase the franchise, legal fees, and other costs incurred in obtaining the franchise.
Discuss how long-lived assets are reported and analyzed.
Return on Assets indicates the amount of net income generated by each dollar of assets. ANALYSIS
Module 6
An entity separate and distinct from its owners. Classified by Purpose Not-for-Profit For Profit Classified by Ownership Publicly held Privately held Facebook IBM Caterpillar General Electric Salvation Army American Cancer Society Cargill Inc. Discuss the major characteristics of a corporation.
Separate Legal Existence Limited Liability of Stockholders Transferable Ownership Rights Ability to Acquire Capital Continuous Life Corporation Management Government Regulations Additional Taxes Characteristics that distinguish corporations from proprietorships and partnerships. Advantages Disadvantages CHARACTERISTICS OF A CORPORATION
Separate Legal Existence Limited Liability of Stockholders Transferable Ownership Rights Ability to Acquire Capital Continuous Life Corporation Management Government Regulations Additional Taxes Corporation acts under its own name rather than in the name of its stockholders.

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