Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Question
Chapter 9, Problem 11ME
To determine
To classify: The cost incurred by employees who work with the maintenance of intangible assets
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Students have asked these similar questions
Which of the following can be recorded as intangible assets? (i) Staff training costs which has resulted in employees acquiring technical knowledge that is valuable to the company.(ii) Brand and customers lists generated by the marketing staff which have resulted in an increase in market share of the company.
Question 6 options:
1)
Item (i) only.
2)
Item (ii) only. Item (i) also cannot be recorded as intangible asset.Staff training costs cannot be recorded as intangible assets because the Company cannot control the economic benefits that are related to the employees' technical knowledge. e.g. employees may resign from the Company.
3)
Both items.
4)
None of the items.
A computer software purchased as an integral part of a
computer-controlled machine tool that cannot operate
without the specific software shall be treated as
O Property, plant and equipment
O Expense
O Intangible asset
O Inventory
Which cost associated with a trademark should
not be capitalized? *
Consulting fee
O Research and development fee
O Design cost
O Attorney fee
An entity is performing an annual test of the impairment
of goodwill for a cash-generating unit. It has determined
that the fair value of the unit exceeds the carrying
amount. Which statement is true concerning the test of
impairment? *
O Goodwill should be retested at the entity level.
The assets and liabilities should be valued to determine if there has been an
impairment of goodwill.
O Goodwill should be written down as impaired.
O Impairment is not indicated and no additional analysis is necessary.
Goodwill should be tested periodically
for impairment
O At the subsidiary level
O At the industry segment level
O At…
Companies that acquire intangible assets under IFRS may only utilize the revaluation model if the useful life of the asset can be easily identified. b. The intangible asset has a thriving market for sale. You have a reliable way of calculating the intangible asset's cost. D. The intangible property consists of money.
Chapter 9 Solutions
Fundamentals Of Financial Accounting
Ch. 9 - Define long-lived assets. What are the two common...Ch. 9 - Under the cost principle, what amounts should be...Ch. 9 - What is the term for recording costs as assets...Ch. 9 - 4. Waste Management, Inc., regularly incurs costs...Ch. 9 - Distinguish between ordinary repairs and...Ch. 9 - Describe the relationship between the expense...Ch. 9 - Why are different depreciation methods allowed?Ch. 9 - In computing depreciation, three values must be...Ch. 9 - Prob. 9QCh. 9 - After merging with Northwest Airlines, Delta...
Ch. 9 - A local politician claimed, to reduce the...Ch. 9 - What is an asset impairment? How is it accounted...Ch. 9 - What is book value? When equipment is sold for...Ch. 9 - Prob. 14QCh. 9 - Prob. 15QCh. 9 - FedEx Corporation reports the cost of its aircraft...Ch. 9 - Prob. 17QCh. 9 - Prob. 18QCh. 9 - (Supplement 9A) How does depletion affect the...Ch. 9 - (Supplement 9B) Over what period should an...Ch. 9 - Prob. 1MCCh. 9 - Prob. 2MCCh. 9 - Prob. 3MCCh. 9 - A company wishes to report the highest earnings...Ch. 9 - Barber, Inc., depreciates its building on a...Ch. 9 - Thornton Industries purchased a machine on July 1...Ch. 9 - ACME. Inc., uses straight-line depreciation for...Ch. 9 - What assets should be amortized using the...Ch. 9 - Prob. 9MCCh. 9 - The Simon Company and the Allen Company each...Ch. 9 - Classifying Long-Lived Assets and Related Cost...Ch. 9 - Prob. 2MECh. 9 - Prob. 3MECh. 9 - Computing Book Value (Straight-Line Depreciation)...Ch. 9 - Computing Book Value (Units-of-Production...Ch. 9 - Computing Book Value (Double-Declining-Balance...Ch. 9 - Calculating Partial-Year Depreciation Calculate...Ch. 9 - Recording Asset Impairment Losses After recording...Ch. 9 - Recording the Disposal of a Long-Lived Asset...Ch. 9 - Reporting and Recording the Disposal of a...Ch. 9 - Prob. 11MECh. 9 - Prob. 12MECh. 9 - Computing and Evaluating the Fixed Asset Turnover...Ch. 9 - (Supplement 9A) Recording Depletion for a Natural...Ch. 9 - Prob. 15MECh. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Determining Financial Statement Effects of an...Ch. 9 - Prob. 4ECh. 9 - Determining Financial Statement Effects of...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Computing Depreciation under Alternative Methods...Ch. 9 - Prob. 8ECh. 9 - Demonstrating the Effect of Book Value on...Ch. 9 - Evaluating the Impact of Estimated Useful Lives of...Ch. 9 - Calculating the Impact of Estimated Useful Lives...Ch. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Computing and Interpreting the Fixed Asset...Ch. 9 - Computing Depreciation and Book Value for Two...Ch. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Prob. 2CPCh. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Prob. 3PACh. 9 - Prob. 4PACh. 9 - Computing Acquisition Cost and Recording...Ch. 9 - Recording and Interpreting the Disposal of...Ch. 9 - Analyzing and Recording Long-Lived Asset...Ch. 9 - Prob. 4PBCh. 9 - Accounting for Operating Activities (Including...Ch. 9 - Prob. 1SDCCh. 9 - Prob. 2SDCCh. 9 - Ethical Decision Making: A Mini-Case Assume you...Ch. 9 - Critical Thinking: Analyzing the Effects of...Ch. 9 - Prob. 7SDCCh. 9 - Accounting for the Use and Disposal of Long-Lived...
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- Depreciation continues to be one of the most controversial, difficult, and important problem areas in accounting. Required: 1. Explain the conventional accounting concept of depreciation accounting, and discuss its conceptual merit with respect to (a) the value of the asset, (b) the amount(s) expensed, and (c) the discretion of management in selecting the method. 2. Answer the following: a. Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial reporting purposes. (Ignore income tax considerations for this case.) b. What depreciation methods might be used for the computer system?arrow_forwardQuestion 37 As a specialist in the accounting of intangible assets, explain if the costs identified can be capitalized. - Tea Limited discovered that it had been manufacturing a product illegally because this product was patented and yet Bee did not have the necessary rights. Bee immediately shut down its factory and hired a firm of lawyers to act on its behalf in the acquisition of the necessary rights to manufacture this product - Legal fees of R60 000 were incurred during July 2007. The legal process was finalised on 31 July 2007, when Tea was then required to pay R900 000 to purchase the rights, including R90 000 in refundable VAT - During the July factory shut-down: - overhead costs of R50 000 were incurred; and - significant market share was lost with the result that Tea’s t total sales over August and September was R30 000 but its expenses were R60 000, resulting in a loss of R40 000 - To increase market share, Bee spent an extra R35 000 aggressively marketing their…arrow_forwardDuring the last decades it has not been unusual for the premium paid to acquire a company to be greater than the fair value of its tangible net assets. This increase in the relative proportions of intangible assets has made the accounting practices for them all the more important. During the same period many companies have spent a great deal of funds to internally develop new intangible assets such as software and brands. IAS 38 Intangible Assets prescribes the accounting treatment for intangible assets. Required: In accordance with IAS 38 Intangible Assets, discuss whether intangible assets should be recognized and if so how they should be initially recognized, and if so how they should be initially recorded and subsequently amortized in the following circumstances: 1. When they are purchased separately from other assets 2. When they are obtained as part of acquiring a business 3. When they are developed internallyarrow_forward
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