Fundamentals of Advanced Accounting
6th Edition
ISBN: 9780077862237
Author: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Publisher: McGraw-Hill Education
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Question
Chapter 3, Problem 1DYS
1.
To determine
Advise J on the acceptability of its suggested immediate write-off of its identifiable intangibles.
2.
To determine
Indicate the relevant factors to consider in allocating the value assigned to identifiable intangibles acquired in a business combination to expense over time.
3.
To determine
Advise J on the acceptability of its suggested treatment of
4.
To determine
Indicate the relevant factors to consider in allocating goodwill across an enterprise’s business units.
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Accounting for intangibles
Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Surety Wireless Company, which had the following figures:
Requirements
Journalize the entry to record Core’s purchase of Surety Wireless for $280,000 cash plus a $420,000 note payable.
What special asset does Core’s acquisition of Surety Wireless identify? How should Core Telecom account for this asset after acquiring Surety Wireless? Explain in detail.
Melton Devices acquires Beck, a small start-up company, by paying $2,170,900 in cash on January 2. Following are the book values and fair values of Beck on the date of acquisition.
(Click the icon to view the book values and fair values.)
Read the requirements.
Requirement a. What is the amount of goodwill acquired?
The amount of goodwill acquired
Requirement b. What intangible assets are acquired? Which of the intangibles have an indefinite life? Which will be amortized? What will the amortization expense be in the year after acquisition? (If an input field
is not used in the table leave the field empty, do not enter a zero)
Intangible
Asset
Finite or
Indefinite Life
Amortization
Amortized?
Expense
Trial Balance
Beck
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Fair Value
Cash
$
29,000 $
29,000
Receivables
100,700
100,650
Manufacturing Equipment
640,350
654,500
Patents (remaining life 8 years)
60,600
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Trademarks
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187,500
Payables
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Print
Done
Core Telecom provides communication services in Iowa, Nebraska, the Dakotas, and Montana. Core purchased goodwill as part of the acquisition of Shipley Wireless Enterprises, which had the following figures:
(Click the icon to view the data.)
Requirements
Journalize the entry to record Core's purchase of Shipley Wireless for $480,000 cash plus a $720,000 note payable.
1.
2.
What special asset does Core's acquisition of Shipley Wireless identify? How should Core Telecom account for this asset after acquiring Shipley Wireless? Explain in detail.
Requirement 1. Journalize the entry to record Core's purchase of Shipley Wireless for $480,000 cash plus a $720,000 note payable. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Accounts and Explanation
Date
Debit
Credit
Requireme
Assets
Equity
Cash
What specialus
Gain on Disposal
Goodwill
Liabilities
Loss on Disposal
Notes Payable
y? How should Core Telecom account for this asset after…
Chapter 3 Solutions
Fundamentals of Advanced Accounting
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Prob. 3QCh. 3 - Prob. 4QCh. 3 - When a parent company applies the initial value...Ch. 3 - Several years ago, Jenkins Company acquired a...Ch. 3 - Benns adopts the equity method for its 100 percent...Ch. 3 - Prob. 8QCh. 3 - Prob. 9QCh. 3 - Prob. 10Q
Ch. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 3 - If no legal, regulatory, contractual, competitive,...Ch. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - Prob. 29PCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 1DYSCh. 3 - FASB ASC AND IASB RESEARCH CASE A vice president...Ch. 3 - Prob. 4DYSCh. 3 - Prob. 5DYS
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