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Abu Baker purchased an on-going business for a price of OMR 76000. The agreed valuation of assets and liabilities were as follows: Premises 55000 Bank Loan 12600 Short-term bonds 9900 Short-term investment 13900 Inventories 1200 Unpaid Electricity 450 Trade Payables Trade Receivables 13500 Motor Vehicle 11000 6700 Bank Deposits 5600 (a) Calculate the value of goodwill In 2019, Abu Baker developed a new product that will be in the market by 2020. In connection with the development of this product, the following costs were incurred in 2019: • Research and development cost OMR 220000 • Materials and supplies consumed OMR 35000 • Compensation paid to research consultants OMR 25000 • t is anticipated that these costs will be recovered in 2025. (b) What is the amount of research and development cost that Abu Baker should record in 2019 as an amortization expense

Abu Baker purchased an on-going business for a price of OMR 76000. The agreed valuation of assets and liabilities were as follows: Premises 55000 Bank Loan 12600 Short-term bonds 9900 Short-term investment 13900 Inventories 1200 Unpaid Electricity 450 Trade Payables Trade Receivables 13500 Motor Vehicle 11000 6700 Bank Deposits 5600 (a) Calculate the value of goodwill In 2019, Abu Baker developed a new product that will be in the market by 2020. In connection with the development of this product, the following costs were incurred in 2019: • Research and development cost OMR 220000 • Materials and supplies consumed OMR 35000 • Compensation paid to research consultants OMR 25000 • t is anticipated that these costs will be recovered in 2025. (b) What is the amount of research and development cost that Abu Baker should record in 2019 as an amortization expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Abu Baker purchased an on-going business for a price of OMR 76000. The agreed valuation of assets and liabilities were as follows: Premises 55000 Bank Loan 12600 Short-term bonds 9900 Short-term investment 13900 Inventories 1200 Unpaid Electricity 450 Trade Payables Trade Receivables 13500 Motor Vehicle 11000 6700 Bank Deposits 5600 (a) Calculate the value of goodwill In 2019, Abu Baker developed a new product that will be in the market by 2020. In connection with the development of this product, the following costs were incurred in 2019: • Research and development cost OMR 220000 • Materials and supplies consumed OMR 35000 • Compensation paid to research consultants OMR 25000 • t is anticipated that these costs will be recovered in 2025. (b) What is the amount of research and development cost that Abu Baker should record in 2019 as an amortization expense
Transcribed Image Text:Abu Baker purchased an on-going business for a price of OMR 76000. The agreed valuation of assets and liabilities were as follows: Premises 55000 Bank Loan 12600 Short-term bonds 9900 Short-term investment 13900 Inventories 1200 Unpaid Electricity 450 Trade Payables Trade Receivables 13500 Motor Vehicle 11000 6700 Bank Deposits 5600 (a) Calculate the value of goodwill In 2019, Abu Baker developed a new product that will be in the market by 2020. In connection with the development of this product, the following costs were incurred in 2019: • Research and development cost OMR 220000 • Materials and supplies consumed OMR 35000 • Compensation paid to research consultants OMR 25000 • t is anticipated that these costs will be recovered in 2025. (b) What is the amount of research and development cost that Abu Baker should record in 2019 as an amortization expense
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