CHAPTER 9 Long-Lived Tangible and Intangible AssetsStonalb, LO 9-2, 9-6American Golf Corporation0021215-201006.12.30 sunt hsmi Insuite od gubuon aubregar tomsiste(yritybors:0M9-2 Deciding Whether to Capitalize or ExpenseAmerican Golf Corporation operates golf courses throughout the country. For each of thefollowing items, enter the correct letter to show whether the cost should be capitalized (C) orexpensed (E).evil Dotimilginer29vil BotiquinTENTransactions1.Purchased a golf course in Orange County, California.2. Paid a landscaping company to clear 100 acres of land on which to build a new course.3. Paid a landscaping company to apply fertilizer to the fairways on its Coyote Hills GolfCourse.6eraub4.Hired a building maintenance company to build a 2,000-square-foot addition on aclubhouse.5. Hired a building maintenance company to replace the locks on a clubhouse and equip-ment shed.has a totalloubo6.Paid an advertising company to create a campaign to build goodwill.

Intangible assets are the type of assets that cannot be touched or seen but are listed on the…

Stogath no LO 9-2, 9-6 American Golf Corporation (00212 to 29.1 002.183 sunt insunt Tangible and Intangible Assets M9-2 Deciding Whether to Capitalize or Expense American Golf Corporation operates golf courses throughout the country. For each of the following items, enter the correct letter to show whether the cost should be capitalized (C) or expensed (E). Transactions 1. 2. 3. bronautbogen omstal 4. Joyc 29vil Doting fr 5. 6. Purchased a golf course in Orange County, California. Paid a landscaping company to clear 100 acres of land on which to build a new course. Paid a landscaping company to apply fertilizer to the fairways on its Coyote Hills Golf Course. Hired a building maintenance company to build a 2,000-square-foot addition on a clubhouse. Hired a building maintenance company to replace the locks on a clubhouse and equip- ment shed. Paid an advertising company to create a campaign to build goodwill.

Stogath no LO 9-2, 9-6 American Golf Corporation (00212 to 29.1 002.183 sunt insunt Tangible and Intangible Assets M9-2 Deciding Whether to Capitalize or Expense American Golf Corporation operates golf courses throughout the country. For each of the following items, enter the correct letter to show whether the cost should be capitalized (C) or expensed (E). Transactions 1. 2. 3. bronautbogen omstal 4. Joyc 29vil Doting fr 5. 6. Purchased a golf course in Orange County, California. Paid a landscaping company to clear 100 acres of land on which to build a new course. Paid a landscaping company to apply fertilizer to the fairways on its Coyote Hills Golf Course. Hired a building maintenance company to build a 2,000-square-foot addition on a clubhouse. Hired a building maintenance company to replace the locks on a clubhouse and equip- ment shed. Paid an advertising company to create a campaign to build goodwill.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Investment Property The Niagara Company owns three properties, which are classified as investment properties according to IAS 40. Details of the properties are given below:Property I:Initial Cost - P250,000FV at 12/31/2022 -P220,000FV at 12/31/2023- P240,000Property II:Initial Cost - P355,000FV at 12/31/2022 -P305,000FV at 12/31/2023- P288,000Property II:Initial Cost - P350,000FV at 12/31/2022 -P375,000FV at 12/31/2023- P365,000Each property was acquired in 2019 with a useful life of 50 years. The company's accounting policy is to use the fair value model for investment properties.What is the gain or loss to be recognized in Niagara's profit or loss for the year ending December 31, 2023? a. P62,000 loss b. P27,000 loss c. P20,000 gain d. P 7,000 loss
Problem 4: Ocean Company recently acquired several items of property, plant and equipment. The transactions are as follows: Purchases a building for P1, 000, 000 in cash and 50, 000 shares of Ocean company with P100 par value which sold for P120 on transaction date Received a parcel of land located in Davao City from a philanthropist as an inducement to locate a plant in the city. The land has a fair value of P1, 500, 000. Acquired a machinery for cash. The machinery was priced at P800, 000 and a 5% cash discount is allowed Acquired an equipment for P200, 000 by issuing a 60-day, 12% note. Required: Determine the cost of the ff: Building_____________________ Land______________________ Machinery_________________ Equipment_____________________ What is the rule in solving the problem?
14 Majestic LLC purchased a factory for lump-sum of RO800,000 paid via bank. The fair value of each of component of the purchase is given below: Asset Fair Market value Land 85000 Building 155000 Equipment 460000 Calculate the amount at which each of the above components shall be recognized on purchase date and write the journal entry for recording purchase transaction. a. Dr Land Ac OMR 85000 Dr Building A/C 155000 Dr Equipment A/C 460000and Cr Cash A/C OMR 700000 b. Dr Land Ac OMR 97120 Dr Building A/C 177120 Dr Equipment A/C 525760 and Cr Cash A/C OMR 800000 c. None of the given options d. Dr Cash A/C OMR 800000 and Cr land A/c 97120 Cr Building A/C 177120 Equipment A/C 460000
EIL.25 (LOS)) (Revaluation Accounting) Pengo Ltd. owns land that it purchased at a cost of V400 million in 2017. The company chooses to use revaluation accounting to account for the land. The land's value fluctuates as follows (all amounts in thousands as of December 31): 2017, V450,000; 2018. V360,000, 2019, V385,000; 2020, ¥410,000, and 2021, V460,000. Instructions Complete the following table below. Value at Other Comprehensive Accumulated Other Recognized December 31 Income Comprehensive Income Net Income 2017 2018 2019 2020
21. The Oscar Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $180,000. At the time of acquisition, Oscar paid $12,000 to have the assets appraised. The appraisal disclosed the following values: Land .................................................. $120,000 Buildings ............................................. 80,000 Equipment ............................................. 40,000 What cost should be assigned to the land, buildings, and equipment, respectively? a. $64,000, $64,000, and $64,000 b. $90,000, $60,000, and $30,000 c. $96,000, $64,000, and $32,000 d. $120,000, $80,000, and $40,000 22. Peterson, Inc. purchased a machine under a deferred payment contract on December 31, 2001. Under the terms of the contract, Peterson is required to make eight annual payments of $140,000 each beginning December 31, 2002. The appropriate interest rate is 8 percent. The purchase price…
26. ABC Corporation has provided information on intangible assets as follows:A patent was purchased from Sinigang Company for P6,000,000 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 P6,000,000 when XYZ sold it to ABC.• On February 1, 20X2, a franchise was purchased from Franchisor Company for P1,440,000. The contract which runs for 20 years provides that 5% of revenue from the franchise must be paid to Franchisor. Revenue from the franchise for 20X2 was P7,500,000.• The following research and development costs were incurred by ABC in 20X2:Materials and equipment 426,000Personnel 567,000Indirect costs 306,000Because of recent events, ABC, on January 1, 20X2, estimates that the remaining useful life of the patent purchased on January 1, 20X1 is only 5 years from January 1, 20X2. On December 31, 20X2, the carrying value of the patent should be?
30.The following expenditures were incurred by an entity during 2021. A piece of land with a dilapidated building was acquired and immediately construction of a new building began. Upon completion of the building, the entity acquired several pieces of machinery for use in its operations.Cash paid on purchase of land-P4,500,000Mortgage assumed on the land bought-P5,000,000Legal fees and title verification expenses-P50,000Payment to squatters on the property to vacate the premises -P100,000Demolition costs incurred-P80,000 Proceeds from sale of salvaged materials-P45,000 Paid to contractor for a building erected-P12,000,000Building permit fees-P20,000Excavation expenses-P50,000Architect’s fees-P150,000Capitalized interest cost on building constructed-P18,000 What are the costs of Land and Building, respectively? Apply the principles prior to the amendments to PAS 16 that is effective on January 1, 2022. a. 9,685,000 and 12,238,000 b. 9,650,000 and 12,273,000 c. 9,550,000 and…
Question Content Area The president of Christmas Corporation donated a building to Tuesday Corporation. The building had an original cost of $675,000, a book value of $255,000, and a fair market value of $475,000. The journal entry by Tuesday Corporation to record this donation will include a debit Building for $675,000 and credit Gain for $200,000. debit Building for $255,000 and credit Gain for $255,000. debit Building for $475,000 and credit Gain for $200,000. debit Building for $475,000 and credit Gain for $475,000.
Investment property Q1 XYZ, a manufacturing company, purchases a property for Ghs1m on 1 January 2016 for its investment potential. The land element of the cost is believed to be Ghs 400,000 and the buildings element is expected to have a useful life of 50 years. At 31 December 2016, local property indices suggest that the fair value of the property has risen to Ghs1.1m. Requirement Explain how the property would be presented in the financial statements as at 31 December 2016 if XYZ adopts the: (i) Cost model; and (ii) Fair value model.
4. ABC Corporation has provided information on intangible assets as follows:A patent was purchased from Sinigang Company for P6,000,000 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 P6,000,000 when XYZ sold it to ABC.• On February 1, 20X2, a franchise was purchased from Franchisor Company for P1,440,000. The contract which runs for 20 years provides that 5% of revenue from the franchise must be paid to Franchisor. Revenue from the franchise for 20X2 was P7,500,000.• The following research and development costs were incurred by ABC in 20X2:Materials and equipment 426,000Personnel 567,000Indirect costs 306,000Because of recent events, ABC, on January 1, 20X2, estimates that the remaining useful life of the patent purchased on January 1, 20X1 is only 5 years from January 1, 20X2. The unamortized cost of the franchise on December 31, 2012, should be?
Q3) (Classification Issues—intangibles) Presented below and on the next page is a list of that could be included in the intangible assets section of the statement of financial position. Investment in a subsidiary company. Timberland, Cost of engineering activity required 10 advance the design of product to the manufacturing stage. Cost of searching for applications of new research findings. Costs incurred in the formation of a corporation. Training costs incurred in start-up of new operation. Purchase cost of a franchise. Goodwill generated internally Cost of testing in search for product alternatives. Goodwill acquired in the purchase of a business. Cost of developing a patent (before achieving economic viability). Cost of purchasing a patent from an inventor. Legal costs incurred in securing a patent. Unrecovered costs of a successful legal suit to protect the patent, Cost of conceptual formulation of possible product alternatives. Cost of purchasing a copyright. Development costs…
P12.1B (L0 1,2,3,5) (Correct Intangible Asset Account) Dolphin Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021: Instructions 3/1/2020 3/1/2020 4/1/2020 6/30/2020 9/1/2020 12/31/2020 6/30/2021 9/1/2021 Intangible Assets 10-year franchise agreement; expires 2/28/28 Organization costsAdvance payment for 2 years for office space Purchased a patent (8-year life) Cost to develop a patent (10-year life) Net operating loss for 2020Research and development costsLegal fee to successfully defend internally developed patent $ 60,000 7,000 24,000 80,000 40,000 61,000 265,000 13,500 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization and reflecting all balances accurately as of that date. (Ignore…