Problem 27-4 (IFRS) establishing a taxi business in a local city during the current year. Legal cost directly attributable to the acquisition Payment to the taxi licensing authority for the Problem 27 An SME incurred the following expenditures in c 1. An enti 15,000 a. Th b. T 1 General start-up cost May June 30 30.000 of the taxi license To C. taxi license, including P10,000 refundable d. purchase taxes Printing business cards of the drivers Payment for an advertisement to be published June 30 100,000 10,000 2. An July 1 July 1 monthly for the next 12 monthe in a local daily newspaper no 50,000 a The economic life of the taxi license is 5 years from the date of acquisition on June 30 with NIL residual value. The taxi drivers own the vehicles which they operate under SME's taxi license. 1. What is the initial cost of the intangible asset? a. 120,000 b. 130,000 c. 135,000 d. 145,000 2. What is the amortization of the intangible asset for the current year? a. 24,000 b. 12,000 c. 26,000 d. 13,000 3. What total amount of expenses should be recognized for the current year? a. 87,000 b. 97,000 C. 62,000 d. 74,000
Problem 27-4 (IFRS) establishing a taxi business in a local city during the current year. Legal cost directly attributable to the acquisition Payment to the taxi licensing authority for the Problem 27 An SME incurred the following expenditures in c 1. An enti 15,000 a. Th b. T 1 General start-up cost May June 30 30.000 of the taxi license To C. taxi license, including P10,000 refundable d. purchase taxes Printing business cards of the drivers Payment for an advertisement to be published June 30 100,000 10,000 2. An July 1 July 1 monthly for the next 12 monthe in a local daily newspaper no 50,000 a The economic life of the taxi license is 5 years from the date of acquisition on June 30 with NIL residual value. The taxi drivers own the vehicles which they operate under SME's taxi license. 1. What is the initial cost of the intangible asset? a. 120,000 b. 130,000 c. 135,000 d. 145,000 2. What is the amortization of the intangible asset for the current year? a. 24,000 b. 12,000 c. 26,000 d. 13,000 3. What total amount of expenses should be recognized for the current year? a. 87,000 b. 97,000 C. 62,000 d. 74,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 64E
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