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Acct 551

In: Business and Management

Submitted By jcbrooks2008
Words 959
Pages 4
Joshua Brooks
ACCT-551 Intermediate Accounting II
Week 1 Assignment: Intangible Assets
01/08/15
E12-1 (a) Indicated which items on the list above would generally be reported as intangible assets in the balance sheet. 1. Purchase cost of a franchise. 2. Goodwill acquired in the purchase of a business. 3. Cost of purchasing a patent from an inventor. 4. Legal costs incurred in securing a patent. 5. Unrecovered costs of a successful legal suit to protect the patent. 6. Cost of purchasing a copyright. 7. Cost of purchasing a trademark.

(b) Indicate how, if at all, the items not reported as intangible assets would be reported in the financial statements. 1. Investment in a subsidiary company-On the Balance Sheet at Long-term investment 2. Timberland-On the Balance Sheet as Property, Plant and Equipment 3. Cost of engineering activity required to advance the design of a product to the manufacturing stage-On the Income Statement as R&D Expense 4. Lease prepayment (6 months’ rent paid in advance)-On the Balance Sheet as Current Asset 5. Cost of equipment obtained-On the Balance Sheet as Property, Plant and Equipment 6. Cost of searching for applications of new research findings-On the Income Statement as R&D Expense 7. Costs incurred in the formation of a corporation-On the Income Statement as Expense 8. Operating losses incurred in the start-up of a business-On the Income Statement as Operating Loss 9. Training costs incurred in start-up of new-On Income Statement as Expense 10. Goodwill generated internally-Not capitalized or recorded 11. Cost of testing in search for product alternatives-On the Income Statement as R&D Expense 12. Cost of developing a patent-On the Income Statement as R&D Expense 13. Cost of conceptual formulation of possible product…...

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