Suddenly Salad had the following expenditures related to developing its trademark. General advertising costs Advertising specifically focused on trademark development Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark $280,000 115,000 53,600 39,900 36,500 $525,000 Total During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the trademark. Management contends that all of the costs increase the value of the trademark; therefore, all the costs should be capitalized. 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized 2. Which of the above costs should the company report as expense in the income statement? Total costs expensed

Suddenly Salad had the following expenditures related to developing its trademark. General advertising costs Advertising specifically focused on trademark development Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark $280,000 115,000 53,600 39,900 36,500 $525,000 Total During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the trademark. Management contends that all of the costs increase the value of the trademark; therefore, all the costs should be capitalized. 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized 2. Which of the above costs should the company report as expense in the income statement? Total costs expensed

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 13E

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Carla Vista Electric Inc. has the following amounts included in its general ledger at December 31, 2023: Organization costs $34,600 Purchased trademarks 18,400 Development phase activities (meet all six development phase criteria) 30,300 Deposits with advertising agency for ads to promote goodwill of company 8,500 Excess of cost over fair value of identifiable net assets of acquired subsidiary 80,600 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 125,600 Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years 75,000 Payment for a favourable lease; lease term of 10 years 14,400 (a) Based on the information provided, calculate the total amount for Carla Vista to report as intangible assets on its statement of financial position at December 31, 2023. Assume Carla Vista uses IFRS to prepare its financial statements.
Kim Company, an SME, has acquired a trademark relating to the introduction of a new manufacturing process. The cost incurred were as follows: Cost of trademark, P5,000,000 Expenditure on promoting the new product, P200,000 Employee benefits relating to the testing of the proper functioning of the new process, P800,000 What is the total cost that should be capitalized as intangible assets?
TLM Technologies had these transactions related to intangible assets during the year. Jan. 2 Purchased a patent from Luna Industries for $200,000. The remaining legal life of the patent is 15 years, and TLM expects the patent to be useful for 8 years. Jan. 5 Paid legal fees in a successful legal defense of the patent of $80,000. June 29 Registered a trademark with the federal government. Registration costs were $11,800. TLM expects to use the trademark indefinitely. Sept. 2 Paid research and development costs of $500,000. Required: 1. Prepare the journal entries necessary to record the transactions. If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. Jan. 2 fill in the blank 3a5c77f4ffe0ff9_2 fill in the blank 3a5c77f4ffe0ff9_3 fill in the blank 3a5c77f4ffe0ff9_5 fill in the blank 3a5c77f4ffe0ff9_6 Jan. 5 fill in the blank 3a5c77f4ffe0ff9_8 fill in the blank…
Dalmatian Corp. follows IFRS and had the following transactions during its year ended December 31: Spent $135,000 developing its brand. Incurred development costs of $254,000 for a new product that met all the intangible asset recognition criteria on September 30 of that same year. Of the $254,000 spent, $160,000 was incurred after September 30. Purchased a customer list for $89,000 from a competitor that was closing its business. What is the total cost of intangible assets that were capitalized during 2020?
Assume REH AG, a hypothetical company, incurs expenditures of €1,000 per monthduring the fiscal year ended 31 December 2009 to develop software for internal use.Under IFRS, the company must treat the expenditures as an expense until the softwaremeets the criteria for recognition as an intangible asset, after which time the expenditurescan be capitalized as an intangible asset.1. What is the accounting impact of the company being able to demonstrate that thesoftware met the criteria for recognition as an intangible asset on 1 February versus1 December?2. How would the treatment of expenditures diff er if the company reported under U.S.GAAP and it had established in 2008 that the project was likely to be completed?
Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2020: Organization costs $34,000 Purchased trademarks 17,500 Development phase activities (meet all six development phase criteria) 29,000 Deposits with advertising agency for ads to promote goodwill of company 8,000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 81,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 125,000 Cost of researching a secret formula for a product that is expected to be marketed for at least 20 years 75,000 Payment for a favourable lease; lease term of 10 years 15,000 Instructions:a) Based on the information provided, calculate the total amount for Berrie to report as intangible assets on its statement of financial position at December 31, 2020. Assume Berrie uses IFRS to prepare its financial statements.…
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The following transactions involving intangible assets of Blossom Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $360,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Blossom is in business. 2. Blossom spent $540,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 3. In January, 2021, Blossom's application for a patent (#2 above) was granted. Legal and registration costs incurred were $189,000. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. 4. Blossom incurred $144,000 in successfully defending one of its patents in an infringement suit. The patent expires during December, 2024. 5. Blossom incurred $432,000 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a…
Assume REH AG, a hypothetical company, incurs expenditures of AC1,000 per month during the fiscal year ended December 31, 2019 to develop software for internal use. Under IFRS, the company must treat the expenditures as an expense until the software meets the criteria for recognition as an intangible asset, after which time the expenditures can be capitalized as an intangible asset. 1 What is the accounting impact of the company being able to demonstrate that the software met the criteria for recognition as an intangible asset on February 1 versus December 1? 2 How would the treatment of expenditures differ if the company reported under US GAAP and it had established in 2018 that the project was likely to be completed and the software used to perform the function intended?
Bluestone Company had three intangible assets at the end of the current year: A patent purchased this year from Miller Co. on January 1 for a cash cost of $5,600. When purchased, the patent had an estimated life of 8 years. A trademark was registered with the federal government for $12,500. Management estimated that the trademark could be worth as much as $290,000 because it has an indefinite life. Computer licensing rights were purchased this year on January 1 for $48,000. The rights are expected to have a four-year useful life to the company. Required: Compute the acquisition cost of each intangible asset. Compute the amortization of each intangible for the current year ended December 31. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
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Joni Marin Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs $24,400 Trademarks 16,900 Discount on bonds payable 37,400 Deposits with advertising agency for ads to promote goodwill of company 12,400 Excess of cost over fair value of net identifiable assets of acquired subsidiary 77,400 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 87,400 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 83,800 (a)On the basis of this information, compute the total amount to be reported by Marin for intangible assets on its balance sheet at year-end. Total amount reported for intangible assets __________