ADV. ACCT CONNECT STAND ALONE
13th Edition
ISBN: 9781266295744
Author: Hoyle
Publisher: MCG
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Chapter 2, Problem 2DYS
a.
To determine
Describe the way in which the FASB ASC Glossary defines a defensive intangible asset.
b.
To determine
Explain the measurement principle that an acquirer should follow in recording identifiable assets acquired in a business combination.
c.
To determine
Identify the value premise (in-use or in exchange) which Company A should assign to the Z-Tech trade name in its consolidated financial statements.
d.
To determine
Explain the way in which Company A determine the estimated useful life of its defensive intangible asset.
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Ahorita Company manufactures wireless transponders for satellite applications. Ahorita has recently acquired Zelltech Company which is primarily known for its software communications development, but also manufactures a specialty transponder under the trade name “Z-Tech” that competes with one of Ahorita’s products. Ahorita will now discontinue Z-Tech and projects that its own product line will see a market share increase. Nonetheless, Ahorita’s management will maintain the rights to the Z-Tech trade name as a defensive intangible asset to prevent its use by competitors, despite the fact that its highest and best use would be to sell the trade name. Ahorita estimates that the trade name has an internal value of $1.5 million, but if sold would yield $2 million.
Answer the following with supporting citations from FASB ASC
a. How does the FASB ASC glossary define a defensive intangible asset?
b. According to ASC Topi 805 Business Combinations, what is the measurement principle…
Ahorita Company manufactures wireless transponders for satellite applications. Ahorita has recently acquired Zelltech Company, which is primarily known for its software communications development but also manufactures a specialty transponder under the trade name “Z-Tech” that competes with one of Ahorita’s products. Ahorita will now discontinue Z-Tech and projects that its own product line will see a market share increase. Nonetheless, Ahorita’s management will maintain the rights to the Z-Tech trade name as a defensive intangible asset to prevent its use by competitors, despite the fact that its high-est and best use would be to sell the trade name. Ahorita estimates that the trade name has an internal value of $1.5 million, but if sold would yield $2 million.
Answer the following with supporting citations from the FASB ASC:a. How does the FASB ASC Glossary define a defensive intangible asset?b. According to ASC Topic 805, “Business Combinations,” what is the measurement principle…
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[The following information applies to the questions displayed below]
EagleEye Company, a manufacturer of digital cameras, is considering entry into the digital binocular market. EagleEye
Company currently does not produce binoculars of any style, so this venture would require a careful analysis of relevant
manufacturing costs to correctly assess its ability to compete. The market price for this binocular style is well established
at $98 per unit. EagleEye has enough square footage in its plant to accommodate the new production line, although
several pieces of new equipment would be required; their estimated cost is $3,750,000. EagleEye requires a minimum ROI
of 12% on any product line investment and estimates that if it enters this market with its digital binocular product at the
prevailing market price, It is confident of its ability to sell 15,000 units each year.
b. Calculate the target cost per unit for entry into the digital binocular market
Target cost per…
Chapter 2 Solutions
ADV. ACCT CONNECT STAND ALONE
Ch. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Problems 19 and 20 are based on the following...Ch. 2 - In the December 31, 2017, consolidated balance...Ch. 2 - Prob. 21PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35APACh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 37APBCh. 2 - Prob. 38APBCh. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYSCh. 2 - Prob. 4DYS
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