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  • Accounting For Intangibles

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    Vixen Aaron Enriquez
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    This document contains information about several problems involving the acquisition of assets and accounting for goodwill and patents. For problem 31-2, it provides the acquisition cost and net assets acquired at fair value to calculate goodwill of $2.7 million for a requirement 1. For requirement 2, it lists the assets and liabilities at fair value, including $2.7 million of goodwill. For problem 31-6, it similarly calculates goodwill of $2.5 million for a requirement 1 and lists assets including that goodwill for requirement 2. Problem 32-2 shows the capitalization and amortization of patents over their useful lives. Problem 32-4 further details the acquisition and amortization of a patent over 15

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    Intermediate Accounting

    Original Title

    Accounting for Intangibles

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    This document contains information about several problems involving the acquisition of assets and accounting for goodwill and patents. For problem 31-2, it provides the acquisition cost and net assets acquired at fair value to calculate goodwill of $2.7 million for a requirement 1. For requirement 2, it lists the assets and liabilities at fair value, including $2.7 million of goodwill. For problem 31-6, it similarly calculates goodwill of $2.5 million for a requirement 1 and lists assets including that goodwill for requirement 2. Problem 32-2 shows the capitalization and amortization of patents over their useful lives. Problem 32-4 further details the acquisition and amortization of a patent over 15

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    152 views3 pages

    Accounting For Intangibles

    Uploaded by

    Vixen Aaron Enriquez
    This document contains information about several problems involving the acquisition of assets and accounting for goodwill and patents. For problem 31-2, it provides the acquisition cost and net assets acquired at fair value to calculate goodwill of $2.7 million for a requirement 1. For requirement 2, it lists the assets and liabilities at fair value, including $2.7 million of goodwill. For problem 31-6, it similarly calculates goodwill of $2.5 million for a requirement 1 and lists assets including that goodwill for requirement 2. Problem 32-2 shows the capitalization and amortization of patents over their useful lives. Problem 32-4 further details the acquisition and amortization of a patent over 15

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Download as xlsx, pdf, or txt
    of 3

    Problem 31-2

    Requirement 1
    Acquisition cost 6,000,000
    Less: Net assets acquired at FV* -3,300,000
    Goodwill 2,700,000

    Total assets at FV 5,300,000


    Less: Total liabilities -2,000,000
    Net assets acquired at FV* 3,300,000

    Requirement 2
    Cash 50,000
    Accounts Receivable 500,000
    Inventory 1,500,000
    Patent 250,000
    Property, Plant, and Equipment 3,000,000
    Goodwill 2,700,000
    Accounts Payable 2,000,000
    Cash 6,000,000

    Problem 31-6
    Requirement 1
    Acquisition cost 9,000,000
    Less: Net assets acquired -6,500,000
    Goodwill 2,500,000

    Land 3,500,000
    Machinery 2,000,000
    Inventory 1,800,000
    Accounts Receivable 700,000
    Trademark 1,000,000
    Patent 500,000
    Less: Accounts Payable -3,000,000
    Net assets acquired 6,500,000

    Requirement 2
    Land 3,500,000
    Machinery 2,000,000
    Inventory 1,800,000
    Accounts Receivable 700,000
    Trademark 1,000,000
    Patent 500,000
    Goodwill 2,500,000
    Accounts Payable 3,000,000
    Cash 9,000,000
    Problem 32-2

    Requirement
    2020
    Research and development expense 510,000
    Cash 510,000

    2023
    Patent 720,000
    Cash 720,000

    Amortization of patent* 45,000


    Patent 45,000
    *(720,000 / 16 years) = 45,000

    2024
    Patent 540,000
    Cash 540,000

    Amortization of patent* 81,000


    Patent 81,000
    *On related patent 45,000
    On competing patent (540,000 / 15 years) 36,000
    Amortization of patent 81,000

    Problem 32-4

    Requirement 1
    2020
    Jan. 1 Patent 7,140,000
    Cash 7,140,000

    Requirement 2
    2020
    Amortization of patent 476,000
    Patent* 476,000
    *(7,140,000 / 15 years) = 476,000

    Requirement 3
    2023
    Amortization of patent 816,000
    Patent* 816,000
    *(5,712,000 / 7 years) = 816,000

    Requirement 4
    Acquisition cost 7,140,000
    Less: Amortization for 2020, 2021, and 2022 (476,000 x 3 years) -1,428,000
    Carrying amount, Jan. 1, 2023 5,712,000
    Less: Amortization for 2023 -816,000
    Carrying amount, Dec. 31, 2023 4,896,000

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