General advertising costs Advertising specifically focused on the trademark Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark Total S 310,000 115,000 59,400 32,000 33,800 $ 550,200 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. Required: 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? 2. Which of the above costs should the company report as expense in the income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized

General advertising costs Advertising specifically focused on the trademark Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark Total S 310,000 115,000 59,400 32,000 33,800 $ 550,200 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. Required: 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? 2. Which of the above costs should the company report as expense in the income statement? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized

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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Use the following to answer questions 31 – 32 Last year T, Inc., had the following expenditures related to developing its trademark: General advertising costs $224,000 Advertising specifically focused on trademark Legal fees to register trademark 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. $ What is the total cost that should be capitalized to the trademark account? Chapter 7 Page 7-1
Royal Com nany purchased a new trademark and incurred the following costs: Purchase price Nonrefundable value added tax Training of personnel on the use of new trademark Research expenditures associated with the purchase of the new trademark Legal cost incurred to register the new trademark 1,000,000 50,000 70,000 240,000 105,000 120,000 Administrative salaries What amouont should be reported as initial cost of the trademark? a. 1,000,000 b. 1,155,000 c. 1,465,000 d. 1,585,000
XYZ Company's policy for the purchases of any asset over the value of $3,000 requires the purchasing clerk and purchasing manager to sign off is an example of а. general authorization. b. special authorization. С. specific authorization. d. generic authorization.
Joni Shamrock Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs Trademarks Discount on bonds payable Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years $23,600 15,300 36,600 11,600 76,600 86,600 Total amount reported for intangible assets $ 82,200 (a) On the basis of the information above, compute the total amount to be reported by Shamrock for intangible assets on its balance sheet at year-end.
Trademarks or trade names a. must be renewed every 40 yearsb. can be considered intangibles with indefinite livesc. are developed internally and thus should not have any related costs capitalized andamortizedd. are synonymous with internally developed goodwill
Please indicate the appropriate category of the following items: Question 23 options: Cost of equipment obtained under capital lease Land Goodwill acquired Music Copyrights The cost of developing a patent The cost of purchasing a patent Brand Names Research costs The cost of an annual update of payroll software Goodwill generated internally 1. Intangible Asset 2. Tangible Asset 3. Expense 4. Other (none of the above) 5. Not recorded on financial statements
The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs Testing and adjusting costs Repair of damages to machine caused by the firm's employees750 Prepaid maintenance contract for first year of machine's use $30,000 2,000 400 260 125 3,000 475 300 Determine the acquisition cost of the machine.
B As the recently appointed auditor for Pharoah Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Pharoah mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023 are as follows INTANGIBLE ASSETS Jan 4 5 Feb. 11 Apr 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months rent on property leased by Pha Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criterial Start-up costs for first six months of operations Account Titles and Explanation Research and Development Expense Intangibila Asses-Pate Rent pens Prisl Advertising Expense Income Summary Operating Expens Notes Parable Interest Expe (To correct intangible asset account) Prepare the journal entry or entries needed to correct this account Allocat…
Asset acquisition begins when the department manager recognizes the need to obtain or replace an existing fixed asset. The manager prepares two copies of a purchase requisition; one is filed in the department and one is sent to the purchasing department. The purchasing department uses the purchase requisition to prepare three copies of a purchase order. One copy of the purchase order is sent to the supplier, another copy is sent to the AP department, and the third copy is filed in the purchasing department. The receiving department receives the assets and packing slip from the vendor and prepares a receiving report. One copy of the receiving report is sent to AP, one is sent to the department manager, and one is sent to the inventory department clerk and used to update the inventory records. The AP clerk receives the invoice, which she compares to the purchase order and receiving report. The AP clerk inputs the information into the computer terminal, posts the liability, updates the…
Asset acquisition begins when the department manager recognizes the need to obtain or replace an existing fixed asset. The manager prepares two copies of a purchase requisition; one is filed in the department and one is sent to the purchasing department. The purchasing department uses the purchase requisition to prepare three copies of a purchase order. One copy of the purchase order is sent to the supplier, another copy is sent to the AP department, and the third copy is filed in the purchasing department. The receiving department receives the assets and packing slip from the vendor and prepares a receiving report. One copy of the receiving report is sent to AP, one is sent to the department manager, and one is sent to the inventory department clerk and used to update the inventory records. The AP clerk receives the invoice, which she compares to the purchase order and receiving report. The AP clerk inputs the information into the computer terminal, posts the liability, updates the…
Current Attempt in Progress Tamarisk SpA has the following amounts reported in its general ledger at December 31, 2022. Organization costs Trademarks Bonds payable Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years (all research phase) €22,800 13,700 35,800 10,800 75,800 Total amount reported for intangible assets 85,800 80,600 (a) On the basis of this information, compute the total amount to be reported by Tamarisk for intangible assets on its statement of financial position at December 31, 2022. As noted, the equipment has alternative future use.
As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 75,000 1,015,000 Jan. 31 Payment of 7 months' rent on property leased by Bryan 91,000 1,106,000 Feb. 11 Premium on common stock 250,000 856,000 March 31 Unamortized bond discount on bonds due March 31, 2040 84,000 940,000 April 30 Promotional expenses related to start-up of business 207,000 1,147,000 June 30 Operating losses for first 6 months 241,000 1,388,000 Instructions Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10…