Show how the intangible assets section of the statement of financial position would be presented four years after acquisition ofthese assets, assuming that there has been no evidence that their values have been impaired. Assume that a full year ofamortization was taken in the year of acquisition.Intangible assets, at cost less accumulated amortizationCopyrightsPatentsCustomer ListsLicencesTotal intangible assets$$ Sandhill Ltd. purchased several intangible assets, as follows:AssetLicencesCustomer lists(a)The following information is also available:AssetLicencesPurchase CostCustomerlistsPatentsCopyrights$80,000In addition to the costs listed above, there were legal fees of $15,100 associated with the licence acquisitions. The licences arevalid in perpetuity, and sales of the products produced under the licences have been strong and are expected to continue atthe same level for many decades.The customer lists are expected to be useful for the next six years.The patent has a legal life of 20 years, but technological changes are expected to render it worthless after about 8 years.The copyright is good for another 40 years, but nearly all the related sales are expected to occur during the next 10 years.$60,300Calculate the annual amortization expense, if any, that should be recorded for each of these intangible assets, assuming thestraight-line method is appropriate. (Do not leave any answer field blank. Enter O for amounts.)$$Asset$PatentAnnual amortization expenseCopyrightPurchase Cost$151,000243,000

Amortization is usually done in a systematic way, such as straight-line amortization, in which the…

Answered: amortization was taken in the year of…

amortization was taken in the year of acquisition. Intangible assets, at cost less accumulated amortization Copyrights Patents Customer Lists $

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EA: The following intangible assets were purchased by Goldstein Corporation: A. A patent with a...

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Jeremiah Corporation has provided the following information on intangible assets as follows: a. A patent was purchased from Isaiah Company for P5,000,000 on January 1, 20x1. On the acquisition date, the patent was estimated to have a useful life of 10 years. The patent had a net book value of P5,000,000 when Isaiah sold it to Jeremiah. b. On February 2, 20x2, a franchise was purchased from Daniel Company for P2,160,000. The contract that runs for 20 years provides that 5%of revenue from the franchise must be paid to Daniel. Revenue from the franchise for 20x2 was P8,000,000. c. Jeremiah incurred the following research and development costs in 20x2: Materials and equipment P462,000 657,000 329,000 P1,448,000 Personnel Indirect costs Total Because of the recent events, Jeremiah, on January 1, 20x2, estimates that the remaining useful life of the patent purchased on January 1, 20x1, is only five (5) years from January 1, 20x2. 1. On December 31, 20x2, the carrying value of the patent…
Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtechmade the following expenditures in connection with the purchase of the land and building:Title insurance $16,000Legal fees for drawing the contract 5,000Pro-rated property taxes for the period after acquisition 36,000State transfer fees 4,000An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3and $1.1 million, respectively. Shortly after acquisition, Samtech spent $82,000 to construct a parking lot and$40,000 for landscaping.Required:1. Determine the initial valuation of each asset Samtech acquired in these transactions.2. Repeat requirement 1, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $250,000 and the salvaged materials were sold for $6,000. In addition, Samtech spent$86,000 clearing and grading the land in preparation for the construction of a new building.
Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.2 and $1.8 million, respectively. Shortly after acquisition, Samtech spent $92,000 to construct a parking lot and $50,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $350,000 and the salvaged materials were sold for $6,000. In addition, Samtech spent $89,000 clearing and grading the land in preparation for the construction of a new…
ABC Co. is acquiring XYZ Inc. XYZ has the following intangible assets: Customer list with an observable fair value of $45,000 Identifiable research and development costs of $150,000 A 5-year operating lease with favorable terms having a discounted present value of $6,000. Patent on a product that is deemed to have no useful life $15,000. ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?
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Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance. Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $ 25,000 9,500 45,000 4,900 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $2 million, respectively. Shortly after acquisition, Samtech spent $91,000 to construct a parking lot and $49,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $340,000 and the salvaged materials were sold for $5,500. In addition, Samtech spent $88,000 clearing and grading the land in preparation for the…
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Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $16,000 5,000 36,000 4,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Shortly after acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Repeat requirement 1, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $250,000 and the salvaged materials were sold for $6,000. In addition, Samtech spent $86,000 clearing and grading the land in preparation for the construction of a new…
Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance $16,000 Legal fees for drawing the contract 5,000 Pro-rated property taxes for the period after the acquisition 36,000 State transfer fees 4,000 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.3 and $1.1 million, respectively. Shortly after the acquisition, Samtech spent $82,000 to construct a parking lot and $40,000 for landscaping. Required: Determine the initial valuation of each asset Samtech acquired in these transactions.
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The following information relates to the intangible assets of Lettuce Express: a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Inc., for $1,500,000 in cash. The fair value of the identifiable net assets of Farmers Produce was $1,350,000. b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at $45,000. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce Express estimates the patent will be useful for only 10 more years. c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $175,000. The contractual life of the franchise is seven years. Problem 7-6B Part 2 2. Prepare the intangible asset section of the December 31, 2021, balance sheet. LETTUCE EXPRESS Balance Sheet December 31, 2021 (Intangible Assets Section) Intangible Assets Franchises Patents Goodwill Total Intangible Assets 24
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