Danube, Toggle, and ConnectOn rely on various intangible assets to operate their businesses. These companies amortize the cost ofthese assets using the straight-line method over the following average estimated useful lives (in years), as reported in their annualreports.Type of Intangible AssetDeveloped TechnologyDanube5.4Trade Names5.9Toggle5.610.1ConnectOn3.511.5Customer Relationships5.15.57.5Required:1. Based on these estimates, identify the company that uses the longest periods for amortizing most of its classes of intangible assets.ToggleDanubeConnectOn2. Will these estimates increase or decrease that company's net income relative to its competitors?IncreaseDecrease< Prev5 of 9Next >

Question 2 increase Amortization expense is an operating expense that reduces net earnings.…

Answered: Danube, Toggle, and ConnectOn rely on…

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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Plant and Equipment Your analysis of Moen Corporation's fixed asset accounts at yearend reveals the following information:1. Moen owns two tracts of land. The first, which cost $18,000, is being held as afuture building site. It has a current market value of $20,000. The second, whichcost $19,000, was purchased 10 years ago. The current office and factorybuildings are on this site. The land has a current market value of $56,000.2. Moen owns two buildings. The office building and the factory building wereboth built 10 years ago at a cost of $50,000 and $120,000, respectively. At thattime, each was expected to have a life of 30 years and a residual value of 10% oforiginal cost. They are being depreciated on a straight-line basis.3. Moen owns factory machinery with a total cost of $51,000 and accumulateddepreciation of $35,300. Included in factory machinery is one machine that cost$7,000 and has accumulated depreciation of $4,200. This machine is being heldfor resale and is not being used…
8-3c. Acquisition of assets.Mix ‘Em Up engages in research to develop cures for famous diseases. Costs incurred during development of one such project are as shown below: Researchers’ wages $10,000 Materials used in research 5,000 Machinery used in research 700 Registration of product discovered 1,950 Attorney’s fees for registration 3,000 Record the journal entry for these items. Assume we credit Cash. 8-1. Acquisition of assets.Growth Company purchased a new machine for its manufacturing facility. Costs incurred in conjunction with this purchase included the following. Identify the costs that will capitalized in the asset.
Asanco Corporation acquired and placed in service the following assets during the year: Asset Date Acquired Cost Basis Building 12/4 $350,000 Computer Equipment 3/2 $40,000 Furniture 4/15 $38,000 Assume that Asanco does not elect §179 expensing and elects not to use bonus depreciation. Answer the following questions. What is Asanco’s first year cost recovery for each asset? Use the format below. Asset Acquisition Date Quarter Recovery Period Original Basis Rate Depreciation Expense What is Asanco’s year 3 cost recovery for each asset if it sells all of these assets on January 10th of year 3? Use the format below. Asset Original Basis Recovery Period Rate Portion of Year Depreciation Expense
Clean Company acquired a tract of land containing an extractable natural resource. Clean is required by its purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural resource. Geological surveys estimate that the recoverable reserves will be 2,000,000 tons, and that the land will have a value of $1,000,000 after restoration. Relevant cost information follows: Land $7,500,000 Estimated restoration costs 1,500,000 If Clean maintains no inventories of extracted material, what should be the charge to depletion expense per ton of extracted material? Oa. $4.00 Ob. $3.20 Oc. $2.60 d. $3.00
The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $122,000 at the beginning of the year was expected to deliver 122,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Tons Delivered: Multiple Choice $12,767 $1,400 A 1,400 How much truck depreciation should be allocated to Site A? (Do not round intermediate calculations. Round your answer to the nearest dollar.) $1,220 B 2,900 None of the answers are correct. с 3,400 D 900
Dynamo Manufacturing paid cash to acquire the assets of an existing company. Among the assets acquired were the following items: Patent with 4 remaining years of legal life Goodwill Dynamo's financial condition just prior to the acquisition of these assets is shown in Required B. Required a. Compute the annual amortization expense for these items. b. Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required A Required B Record the acquisition of the intangible assets and the related amortization expense for year 1 in a horizontal statements model. (In the Cash Flo operating activities, FA for financing activities, or IA for investing activity. Leave the cell blank if there is no effect. Enter any decreases to accoun all cells will require entry.) Event Acquisition Amortization Cash + 86,400 + + + Balance Sheet Assets Patent + Goodwill $…
Answer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report O Straight-line method O Double declining method O Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. O Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? O Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. O Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using…
Acquisition Cost of Long-Lived Asset The following data relate to a firm's purchase of a machine used in the manufacture of its product: Invoice price Applicable sales tax Cash discount taken for prompt payment Freight paid Cost of insurance coverage on machine while in transit Installation costs Testing and adjusting costs Repair of damages to machine caused by the firm's employees Prepaid maintenance contract for first year of machine's use Determine the acquisition cost of the machine. Acquisition Cost = $ $30,000 2,000 400 260 125 3,000 475 750 300
Computing Impairment of Intangible Assets Stiller Company had the following information for its three intangible assets. 1. Patent: A patent was purchased for $180,000 on June 30, 2018. Stiller estimated the useful life of the patent to be 15 years. On December 31, 2020, the estimated future cash flows attributed to the patent were $153,000. The fair value of the patent was $135,000. 2. Trademark: A trademark was purchased for $9,000 on August 31, 2019. The trademark is considered to have an indefinite life. The fair value of the trademark on December 31, 2020, is $4,500. 3. Goodwill: Stiller recorded goodwill in January 2019, related to a purchase of another company. The carrying value of goodwill is $54,000 on December 31, 2020. On December 31, 2020, the segment for which the goodwill relates had a fair value of $1,044,000. The book value of the net assets of the segment (including goodwill) is $1,080,000. Note: Round each of your answers to the nearest whole dollar. a. Classify each…
! Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight-Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $26,000. On the date of delivery, January 2, the company paid $7,000 on the machine, with the balance on credit at 11 percent interest due in six months. On January 3, it paid $1,100 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,700. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $4,000. E8-4 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense
Summer Rain Co. has the following assets: Land sold in the ordinary course of business 1,000,000 Land used as plant site 5,000,000 Building under construction to used as new office 12,000,000 Building leased out under various operating leases 6,000,000 Land and building classified as ‘held for sale assets’ 5,000,000 Spare parts and minor tools (with average useful life of 1 yr.) 800,000 Equipment held for rental under various operating leases 1,200,000 Fixtures used in rendering services 500,000 Bearer animals 200,000 Bearer plants 100,000 How much is classified as property, plant and equipment?
The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $119,000 at the beginning of the year was expected to deliver 202,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Multiple Choice C $17,144 Tons Delivered: How much truck depreciation should be allocated to Site A? Note: Do not round Intermediate calculations. Round your answer to the nearest dollar. $1,296 $1,190 A 2,200 None of the answers are correct. B 3,700 C 4, 200 D 1,700

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