Suddenly Salad had the following expenditures related to developing its trademark. General advertising costs Advertising specifically focused on trademark development Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark $280,000 115,000 53,600 39,900 36,500 $525,000 Total 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. 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized 2. Which of the above costs should the company report as expense in the income statement? Total costs expensed

Suddenly Salad had the following expenditures related to developing its trademark. General advertising costs Advertising specifically focused on trademark development Legal fees to register trademark Registration and design fees for the trademark Legal fees for successful defense of the new trademark $280,000 115,000 53,600 39,900 36,500 $525,000 Total 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. 1. Which of the above costs should the company capitalize to the Trademark account in the balance sheet? Total costs capitalized 2. Which of the above costs should the company report as expense in the income statement? Total costs expensed

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

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 7RE

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Use the following to answer questions 31-32 Last year the company had the following expenditures related to developing its trademark: General advertising costs $200,000 Advertising specifically focused on trademark 50,000 Legal fees to register trademark 5,000 Legal fees for successful defense of new trademark 80,000 $335,000 Total 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?
[The following information applies to the questions displayed below.] Satellite Systems modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures: Basic research to develop the technology Engineering design work Development of a prototype device. Testing and modification of the prototype Legal fees for patent application Legal fees for successful defense of the new patent Total During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all costs of the patent. Management contends that the device represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized. Exercise 7-7 (Algo) Part 1 $ 3,600,000 1,120,000. 560,000 360,000 76,000 36,000 $ 5,752,000 Required: 1. How much should Satellite Systems capitalize in the Patent account in the balance sheet? Patent costs capitalized
Brill Company made the following expenditures during the current year: Costs to develop computer software for internal use in Brill’s general management information system: 1 000 000 Cost of market research activities 750 000 How much Brill Company's expense?
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
Brill Company made the following expenditures during the current year: Costs to develop computer software for internal use in Brill’s general management information system: 1 000 000 Cost of market research activities 750 000 Brill Company’s total Expense?
What is the total amount that Bryant Inc. should expense during the year (versus the company capitalizing the costs): 1. Purchased the cost of a patent from another company for $165,500. 2. Incurred $278,900 of Research and Development Costs. 3. Internal costs incurred to create a patent for $105,490. 4. Purchased a tradename for $97,300. 5. Goodwill from purchasing another division for $205,800.
Assume REH AG, a hypothetical company, incurs expenditures of €1,000 per monthduring the fiscal year ended 31 December 2009 to develop software for internal use.Under IFRS, the company must treat the expenditures as an expense until the softwaremeets the criteria for recognition as an intangible asset, after which time the expenditurescan be capitalized as an intangible asset.1. What is the accounting impact of the company being able to demonstrate that thesoftware met the criteria for recognition as an intangible asset on 1 February versus1 December?2. How would the treatment of expenditures diff er if the company reported under U.S.GAAP and it had established in 2008 that the project was likely to be completed?
In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for A. No accounting entry is necessary. B. Capitalize to a different asset account. C. Capitalize to the Machine account. $650,000. D. Expense. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. v Pays $1,200 for a one-year insurance policy for the machine, with coverage beginning when the machine is placed into service on February 16.
During the past two years, through extensive advertising and improved customer relations, jEAN Corporation estimated that it had developed customer goodwill worth $500,000. For the current year, determine the amount of goodwill Orange may amortize. a.$26,667 b.$-0- c.$16,667 d.$33,333
Assume REH AG, a hypothetical company, incurs expenditures of AC1,000 per month during the fiscal year ended December 31, 2019 to develop software for internal use. Under IFRS, the company must treat the expenditures as an expense until the software meets the criteria for recognition as an intangible asset, after which time the expenditures can be capitalized as an intangible asset. 1 What is the accounting impact of the company being able to demonstrate that the software met the criteria for recognition as an intangible asset on February 1 versus December 1? 2 How would the treatment of expenditures differ if the company reported under US GAAP and it had established in 2018 that the project was likely to be completed and the software used to perform the function intended?
a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $1,600. When purchased, the patent had an estimated life of 8 years. b. A trademark was registered with the federal government for $10,000. Management estimated that the trademark could be worth as much as $240,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.) Amortization…
Joni Marin Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs $24,400 Trademarks 16,900 Discount on bonds payable 37,400 Deposits with advertising agency for ads to promote goodwill of company 12,400 Excess of cost over fair value of net identifiable assets of acquired subsidiary 77,400 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 87,400 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 83,800 (a)On the basis of this information, compute the total amount to be reported by Marin for intangible assets on its balance sheet at year-end. Total amount reported for intangible assets __________