FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
9th Edition
ISBN: 9781119595724
Author: Kimmel
Publisher: WILEY C
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Question
Chapter 9, Problem 9.17E
(a)
To determine
Intangible Assets: These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark,
To explain: the reason for depreciating a building.
(b)
To determine
To explain: the reason for the building having zero book value but substantial fair value.
(c)
To determine
To state: some examples of intangibles found in college campus.
(d)
To determine
To give: some examples of company or product trademarks or trade names.
To determine
To explain: whether the trade names and trademarks reported on a company’s
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uepreciate its buildings?
(b) How can a company have a building that has a zero reported book value but substan-
tial fair value?
(c) What are some examples of intangibles that you might find on your college campus?
(d) Give some examples of company or product trademarks or trade names. Are trade
names and trademarks reported on a company's balance sheet?
E7-15 Suppose during 2017 that Federal Express reported the following information (in
millions): net sales of $35,497 and net income of $98. Its balance sheet also showed total
assets at the beginning of the year of $25,633 and total assets at the end of the year of $24,244.
Instructions
Calculate the (a) asset turnover and (b) return on assets.
The Home Depot financial statements appear in Appendix A at the end of this textbook. Use thesestatements to answer the following questions and indicate where in the financial statements youfound the information.
a. What depreciation method does Home Depot use for buildings, furniture, fixtures, and equip-ment? What are the useful lives over which these assets are depreciated?
b. From the notes to Home Depot ’s financial statements, what can you learn about the company’spolicy regarding impairment of plant assets?c. Locate Home Depot ’s balance sheet and find the section entitled “Property and Equipment, atcost.” As of January 31, 2010, determine the amount of the company’s investment in propertyand equipment and the amount of depreciation taken to date on those assets. Are these assets,taken as a whole, near the beginning or end of their estimated useful lives? Explain your answer.
Why do we need to depreciate our property, plant, and equipment? (Discuss also the treatment of depreciation expense in the financial statements.)
Please don't copy paste answers you will provide. Make it original thank you.
Chapter 9 Solutions
FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
Ch. 9 - Prob. 1QCh. 9 - Prob. 2QCh. 9 - Prob. 3QCh. 9 - Prob. 4QCh. 9 - Prob. 5QCh. 9 - Prob. 6QCh. 9 - Prob. 7QCh. 9 - Prob. 8QCh. 9 - Prob. 9QCh. 9 - In the fourth year of an assets 5-year useful...
Ch. 9 - Prob. 11QCh. 9 - Prob. 12QCh. 9 - Prob. 13QCh. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - Prob. 16QCh. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - Prob. 19QCh. 9 - Prob. 20QCh. 9 - Prob. 22QCh. 9 - Give an example of an industry that would be...Ch. 9 - Prob. 24QCh. 9 - Prob. 25QCh. 9 - Prob. 26QCh. 9 - Prob. 27QCh. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Prob. 9.3BECh. 9 - Prob. 9.4BECh. 9 - Prob. 9.5BECh. 9 - Prob. 9.7BECh. 9 - Prob. 9.13BECh. 9 - Prob. 9.14BECh. 9 - Prob. 9.1DIECh. 9 - Prob. 9.2bDIECh. 9 - Prob. 9.3DIECh. 9 - Match the statement with the term most directly...Ch. 9 - Prob. 9.2ECh. 9 - Prob. 9.4ECh. 9 - Prob. 9.9ECh. 9 - Prob. 9.12ECh. 9 - Prob. 9.13ECh. 9 - Prob. 9.16ECh. 9 - Prob. 9.17ECh. 9 - Prob. 9.19ECh. 9 - Prob. 9.20ECh. 9 - Prob. 9.21ECh. 9 - Prob. 9.23ECh. 9 - Prob. 9.24ECh. 9 - Prob. 9.1APCh. 9 - Prob. 9.7APCh. 9 - Prob. 9.2EYCTCh. 9 - Prob. 9.3EYCTCh. 9 - Prob. 9.6EYCTCh. 9 - Prob. 9.7EYCTCh. 9 - Prob. 9.8EYCTCh. 9 - Prob. 9.10EYCTCh. 9 - CONSIDERING PEOPLE, PLANET, AND PROFIT The March...Ch. 9 - Prob. 9.1IECh. 9 - Prob. 9.2IECh. 9 - Prob. 9.3IECh. 9 - Prob. 9.4IE
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Similar questions
- A trademark is an intangible asset that has value to a business. Assume that you are an accountant with the responsibility of valuing the trademark of a well-known company such as Nike or McDonalds. What makes each of these companies unique and adds value? While the value of a trademark may not necessarily be recorded on the companys balance sheet, discuss what factors you think would affect (increase or decrease) the value of the companys trademark? Consider your answer through the perspective of various stakeholders.arrow_forwardWhich of the following is/are not capitalized as an intangible asset? Select one: a. Legal costs to defend a patent successfully and goodwill acquired when a company purchases another company. b. Costs of an internally developed patent and goodwill acquired when a company purchases another company. c. Costs of an internally developed patent and legal costs to defend a patent successfully. d. Goodwill acquired when a company purchases another company and costs to purchase a patent. e. Costs to purchase a patent and legal costs to defend a patent successfully.arrow_forwardAs you have seen in Chapter 17, companies depreciate, or write off, the expense of tangible assets such as trucks and equipment over a period of their useful lives. Many companies also have intangible assets that must be accounted for as an expense over a period of time. Intangible assets are resources that benefit the company but do not have any physical substance. Some examples are copyrights, franchises, patents, trademarks, and leases. In accounting, intangible assets are written off in a procedure known as asset amortization. This is much like straight-line depreciation, but there is no salvage value. Suppose you are the accountant for a certain pharmaceutical company. In January 2000, the company purchased the patent rights for a new medication from Novae, Inc., for $12,000,000. The patent had 15 years remaining as its useful life. In January 2005, your pharmaceutical company successfully defended its right to the patent in a lawsuit that cost $630,000 in legal fees. (a) Using…arrow_forward
- Tom Parkey has prepared the following list of statements about depreciation. 1. Depreciation is a process of asset valuation, not cost allocation.2. Depreciation provides for the proper recording of expenses (efforts) with revenues (results).3. The book value of a plant asset should approximate its fair value.4. Depreciation applies to three classes of plant assets: land, buildings, and equipment.5. Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time.6. The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence.7. Recognizing depreciation on an asset results in an accumulation of cash for replacement of the asset.8. The balance in the Accumulated Depreciation account represents the total cost that has been charged to expense since placing the asset in service.9. Depreciation expense and accumulated depreciation are reported on the income statement.10. Four…arrow_forwardIndicate whether each of the following statements is true or false. When land with an old building is purchased as a future building site, the cost of removing the old building is part of the cost of the new building. Answer Special assessments for local improvements such as streetlights and sewers should be accounted for as land improvements. Answer Avoidable interest is the amount of interest cost that a company could theoretically avoid if it had not made expenditures for the asset.arrow_forwardA plant site donated by a city to Ace Manufacturing, which plans to open a new factory, should be recorded on Ace's books at: a. The nominal cost of taking title to it b. It's fair market value c. Zero value, but footnoted d. The value assigned to it by the company's directorsarrow_forward
- Which of the following groups would be classified as intangible assets for financial accounting andreporting purposes? a. long-term notes receivable, copyrights, goodwill, and trademarksb. patents, computer software costs, franchises, and trademarksc. computer software costs, research and development costs for internally developed patents,patents, and goodwilld. organization costs, goodwill, costs of employee training programs, and trademarksarrow_forwardAn example of a non-depreciable asset or property that can be used to earn business is ____________. Question 5 options: a) Building b) Equipment c) Patent d) Furniturearrow_forwardWhich of the following groups would be classified as intangible assets for financial accounting and reporting purposes? Computer software costs, development costs for internally developed patents, research, and goodwill Long-term notes receivable, copyrights, goodwill, and trademarks Start-up costs, goodwill, costs of employee training programs, and trademarks Patents, software development costs, franchises, copyrights, and trademarksarrow_forward
- Based on the knowledge that you have learned from this unit and the relevant accounting standards, answer the following questions. Your answers must demonstrate your own understandings and applications of relevant accounting standards, but not a direct quote of the standards. a.Use an example to explain what are included in the original cost of property, plant, and equipment when they are initially acquired. b. What is the basic principle for valuing property, plant, and equipment acquired in exchange for other non-monetary assets? c. Use an example to illustrate how gain or loss on disposal is calculated and recorded when an item of property, plant, and equipment is disposed of.arrow_forward2. If a corporation purchases land and building and subsequently tears down the building and uses the property as a parking lot, the proper accounting treatment of the cost of the building would depend on A) the intention of management for the property when the building was acquired. B) the significance of the cost allocated to the building in relation to the combined cost of the land and building. C) the length of time for which the building was held prior to its demolition. D) the contemplated future use of the parking lot.arrow_forwardraxton Inc. is considering the write-off of a limited-life intangible because of its lack of profitability. Explain to the management of Braxton how to determine whether a write-off is permitted.arrow_forward
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