Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 10, Problem 10.7DMP
1.
To determine
Intangible Assets:
These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark,
To Discuss: The meaning of the term goodwill.
2.
To determine
To Indicate: The situation in which the controller of Corporation A would be correct in the valuation of goodwill.
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Students have asked these similar questions
LO 9
Assets
Cash + Patent +
94,000
ΝΑ
+
+
Exercise 8-20A Computing and recording the amortization of intangibles
Texas Manufacturing paid cash to purchase the assets of an existing company. Among the assets
purchased were the following items:
Goodwill
ΝΑ
Texas's financial condition just prior to the purchase of these assets is shown in the following
statements model:
=
Patent with 5 remaining years of legal life
Goodwill
Liab.
ΝΑ
Equity Rev.
+ 94,000
ΝΑ
Exp.
$36,000
40,000
ΝΑ
= Net Inc.
=
ΝΑ
Cash Flow
ΝΑ
Required
a. Compute the annual amortization expense for these items if applicable.
b. Record the purchase of the intangible assets and the related amortization expense for year 1
in a horizontal statements model like the preceding one.
c. Prepare the journal entries to record the purchase of the intangible assets and the related
amortization for year 1.
Mini-Exercise 6-7 (Algo) Goodwill LO 6-9
Backstreets Company recently acquired all of Jungleland Incorporated's net assets in a business acquisition. The cash purchase price
was $9.1 million. Jungleland's assets and liabilities had the following appraised values immediately prior to the acquisition: land, $2.5
million; buildings, $4.2 million; inventory, $3.0 million; long-term notes payable, for which Backstreets Company assumes payment
responsibilities, $2.3 million.
Required:
How much goodwill will result from this transaction?
Note: Enter your answer in whole dollars.
Goodwill
E 10-9
Acquisition cost;
noninterest-bearing
note
LO3
On January 1, 2013, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a
noninterest-bearing note requiring $25,000 to be paid on December 31, 2015. The fair value of the tractor is not
determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement.
The company's financial year-end is December 31.
Required:
1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.
2. How much interest expense will the company include in its 2013 and 2014 income statements for this note?
3. What is the amount of the liability the company will report in its 2013 and 2014 statements of financial
position for this note?
Chapter 10 Solutions
Intermediate Accounting, 10 Ed
Ch. 10 - Prob. 10.1QCh. 10 - Prob. 10.2QCh. 10 - Prob. 10.3QCh. 10 - Prob. 10.4QCh. 10 - Prob. 10.5QCh. 10 - Prob. 10.6QCh. 10 - When an asset is acquired and a note payable is...Ch. 10 - Explain how assets acquired in exchange for equity...Ch. 10 - Prob. 10.9QCh. 10 - What account is credited when a company receives...
Ch. 10 - Prob. 10.11QCh. 10 - Identify the two exceptions to valuing property,...Ch. 10 - In what situations is interest capitalized?Ch. 10 - Define average accumulated expenditures and...Ch. 10 - Explain the difference between the specific...Ch. 10 - Prob. 10.16QCh. 10 - Prob. 10.17QCh. 10 - Explain the accounting treatment of costs incurred...Ch. 10 - Explain the difference in the accounting treatment...Ch. 10 - Prob. 10.20QCh. 10 - Prob. 10.21QCh. 10 - Prob. 10.22QCh. 10 - Prob. 10.23QCh. 10 - Acquisition cost; machine LO101 Beavert on Lumber...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Cost of a natural resource; asset retirement...Ch. 10 - Asset retirement obligation LO101 Refer to the...Ch. 10 - Prob. 10.6BECh. 10 - Prob. 10.8BECh. 10 - Prob. 10.11BECh. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Nonmonetary exchange LO106 Refer to the situation...Ch. 10 - Prob. 10.14BECh. 10 - Prob. 10.15BECh. 10 - Research and development LO108 Maxtor Technology...Ch. 10 - Prob. 10.18BECh. 10 - Prob. 10.19BECh. 10 - Research and development; various types LO108...Ch. 10 - Prob. 10.21BECh. 10 - Acquisition cost; equipment LO101 Oaktree Company...Ch. 10 - Prob. 10.3ECh. 10 - Prob. 10.7ECh. 10 - Prob. 10.8ECh. 10 - Acquisition costs; noninterest-bearing note ...Ch. 10 - Prob. 10.11ECh. 10 - Prob. 10.14ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.16ECh. 10 - Nonmonetary exchange LO106 [This is a variation...Ch. 10 - Prob. 10.18ECh. 10 - Prob. 10.19ECh. 10 - Prob. 10.20ECh. 10 - FASB codification research LO101, LO106, LO107,...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31ECh. 10 - Prob. 10.32ECh. 10 - Intangibles; start-up costs LO101, LO108 Freitas...Ch. 10 - Prob. 10.1PCh. 10 - Prob. 10.4PCh. 10 - Acquisition costs; journal entries LO101, LO103,...Ch. 10 - Prob. 10.6PCh. 10 - Prob. 10.8PCh. 10 - Prob. 10.9PCh. 10 - Judgment Case 101 Acquisition costs LO101, LO103,...Ch. 10 - Judgment Case 104 Interest capitalization LO107...Ch. 10 - Prob. 10.6DMPCh. 10 - Prob. 10.7DMPCh. 10 - Judgment Case 108 Research and development LO108...Ch. 10 - Prob. 10.9DMPCh. 10 - Prob. 10.11DMPCh. 10 - Prob. 10.13DMPCh. 10 - Prob. 10.15DMPCh. 10 - Prob. 10.16DMP
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