Exercise 12 2 Classification Issues Intangibles Presented below is selected

Exercise 12 2 classification issues intangibles

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Exercise 12-2 (Classification Issues - Intangibles)Presented below is selected account information related to Matt Perry Inc. as of December 21, 2010.All these accounts have debit balances.Instructions:Identify which items should be classified as an intangible asset. For those items not classified as anintangible asset, indicate where they would be reported in the financial statements. Account Classification Cable television franchises Intangible Music copyrights Intangible Research and development costs Expenses Goodwill Intangible Cash Current assets Discount on notes payable Contra liability Acounts receivable Current assets Property, plant and equipment Non current assets Internet domain name Intangible Film Contract rights Intangible Customer lists Intangible Prepaid expenses Current assets Convenants not to compete Intangible Brand names Intangible Notes receivable Asset (current or non-current, depending on due date) Investments in affiliated companies Investment (asset) Organization costs Expenses Land PPE (non current asset)
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Exercise 12-3 (Classification Issues - Intangible Asset)Langrova Inc. has the following amounts included in its general ledger at December 31, 2010.Organization costs$24,000 Trademarks20,000Discount on bonds payable35,000Deposits with advertising agency for ads to promote goodwill of company10,000Excess of cost over fair value of net identifiable asset of acquired subsidiary*75,000Cost of equipment acquired for research and development projects; theequipment has an alternative future use.90,000Cost of developing a secret formula for a product that is expected to bemarketed for at least 20 years.70,000*Note: By definition, Goodwill is the excess of fair value of net identifiable assets of an acquired subsidiary.Instructions(a) On the basis of the information above, compute the total amount to be reported by Langrova forintangible assets on its balance sheet at December 31, 2010. Equipment has an alternative future use. (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes.
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