Use the following to answer questions 31 – 32 Last year T, Inc., had the following expenditures related to developing its trademark: General advertising costs Advertising specifically focused on trademark Legal fees to register trademark $224,000 45,600 550 Legal fees for successful defense of new trademark 75,000 Total $345,150 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 the costs increase the value of the trademark and, therefore, should be capitalized. 31. Which of the above costs should NOT be capitalized? 32. $ capitalized to the trademark account? Chapter 7 What is the total cost that should be Page 7-1

Use the following to answer questions 31 – 32 Last year T, Inc., had the following expenditures related to developing its trademark: General advertising costs Advertising specifically focused on trademark Legal fees to register trademark $224,000 45,600 550 Legal fees for successful defense of new trademark 75,000 Total $345,150 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 the costs increase the value of the trademark and, therefore, should be capitalized. 31. Which of the above costs should NOT be capitalized? 32. $ capitalized to the trademark account? Chapter 7 What is the total cost that should be Page 7-1

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 75P

See similar textbooks

Similar questions

Ma1. Ford Corporation estimates the fair value of its trademark is estimated to be $560,000. The current carrying value of the trademark on the books is $610,000. Yana expects that over the remaining useful life of the trademark, the trademark will help to generate $620,000 in net cash flows. Does Ford need to make any adjustments at year-end to properly present the trademark on the balance sheet?
Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2023: Organization costs$ 34,000 Purchased trademarks17,500 Development phase activities (meet all six development phase criteria)29,000 Deposits with advertising agency for ads to promote goodwill of company8,000 Excess of cost over fair value of identifiable net assets of acquired subsidiary81,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use125,000 Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years75,000 Payment for a favourable lease; lease term of 10 years15,000 Instructions 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, 2023. Assume Berrie uses IFRS to prepare its financial statements.
Problem 12. On January 1, 2020, Brie Company bought a trademark for P3,000,000. An independent consultant was hired to estimate the trademark’s life which is to be indefinite. The carrying amount of the trademark was P1,500,000 on the books of the seller. On December 31, 2020, what is the carrying amount of the trademark in Brie’s books?
Kleen Company acquired patent rights on January 10 of Year 1 for $344,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $17,000. If required, round your answers to the nearest dollar. Question Content Area a. Determine the patent amortization expense for Year 4 ended December 31.$fill in the blank 88c643fcdfe1040_1 Feedback Area Feedback For intangible assets with finite lives, a company uses the straight-line method to calculate amortization. If a company successfully defends a patent it becomes part of the cost of the patent. If the company loses a lawsuit regarding a patent infringement, then the patent is written off. Question Content Area b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. blank Amortization Expense-Patents…
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.
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?
12. On January 2, 20X0, Earth Company bought a trademark from Mars Company for P600,000. Earth retained an independent consultant, who estimated the trademark’s remaining life to be 20 years. Its amortized cost on Mars’ accounting records was P456, 000. What amount should the trademark be initially recorded?
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.…
A trademark was purchased from Jordan Company for P120,000 on July 1, 20x1. Expenditures forsuccessful litigation in defense of the trademark totaling P30,000 were paid on July 1, 20x4.Management estimates that the useful life of the trademark will be 20 years from the date of acquisition 8. What is the carrying amount of the trademark on December 31, 20x4?
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…
Baguio Corp. incurred P350,000 of research and development coststo develop a product for whicha patent was granted on January 2,2021. Legal fees and other costs associated with registration of thepatent totaled P100,000. On March 31, 2026, Baguio paid P150,000for legal fees in a successful defense of the patent. What total amountis capitalized for the patent through March 31, 2026?
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?