Question #1 (5 marks) 1. SuperIdeas Corp, a publicly accountable entity, incurred the following costs in its research and development division:
This question has been answered
Question

Hey guys I need help with this assignment for Intermediate Financial Accounting 1. Thanks!

1 Attachment
Question #1 (5 marks) 1. SuperIdeas Corp, a publicly accountable entity, incurred the following costs in its research and development division: Jan 1 - July 31, 2012 Aug 1- Dec. 31, 2012 Materials 10,000 12,000 Labour costs 15,000 32,000 Directly attributable overhead 8,000 15,000 At August 1, 2012, SuperIdeas determined that the project was technically feasible but not commercially viable. How much, if any, of the costs can be capitalized for fiscal 2012? A) $0 B) $44,000 C) $59,000 D) $92,000 2 Which statement does not describe the 'successful efforts' method? A) A method of accounting that capitalizes costs of mineral exploration and evaluation only if the outcome is successful. B) A method of accounting that capitalizes costs of mineral exploration and evaluation only if the production is technically feasible. C) A method of accounting that capitalizes costs of mineral exploration and evaluation until the production is successful. D) A method of accounting that capitalizes costs of mineral exploration and evaluation only if the production is commercially viable. 3 Which of the following is not a characteristic of an intangible asset? A) It has no physical substance. B) Its useful life may exceed its legal life. C) It may be amortized using the straight-line method. D) It may be impaired and written off. 4 What criterion differentiates the recognition of a biological asset from the recognition of other assets? A) The entity must control the biological asset. B) The fair value of the biological asset can be reliably measurable. C) Future economic benefits from the biological asset must be probable. D) The cost of the biological asset can be reliably measured.
Background image of page 1
5 Which statement is not correct? A) Goodwill represents the difference between the purchase price and the fair value of net assets acquired. B) Fair value is the amount at which an item could be sold in an arm's length transaction. C) Economic goodwill differs from accounting goodwill and can be created by branding. D) Fair value is the amount which could be exchanged in an arm's length transaction. Question 2 (4 marks) Forest Company paid $38,000,000 for a warehouse and related assets from a company that was in bankruptcy. The warehouse includes land, building, moving equipment, and heating /ventilation/air conditioning (HVAC) system. An independent appraiser valued these items individually as follows: Requirement: Allocate the purchase price among the assets acquired.
Background image of page 2

End of preview

Answered by Expert Tutors
1 Attachment
Assignment 4.docx
docx
The student who asked this rated it
Subject: Accounting, Business
Get unstuck

416,475 students got unstuck by Course
Hero in the last week

step by step solutions

Our Expert Tutors provide step by step solutions to help you excel in your courses