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intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrights

intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrights

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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From page 7-2 of the VLN, intangible assets are long term assets and would NOT include: Group of answer choices A. Goodwill B. Natural gas C. Patents D. Copyrights
Practice JAX Inc., incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building: Purchase price for the land Sale of salvage parts already on land Demolition of the old building Groundbreaking ceremony (food & supplies) $300,000 12,000 16,000 2,000 Title insurance 4,000 Real estate agent commissions 3,000 Back taxes on property 2,000 Property taxes due later in the year 3,000 Architect fees for blueprints for new building 15,000 Interest incurred for the first year 9,000 What amount should be recorded to the Land account? S Practice KEV, Inc., purchased a piece of equipment by paying $52,000 cash with a fair value of $54,000. KEV also incurred shipping costs of $600 to get the equipment back to its factory, $300 to get the equipment calibrated and installed, and $1,200 for a one- year maintenance contract. For what amount should KEV record the equipment? $ Natural Resources -Oil, natural gas, timber, etc. INTANGIBLE ASSETS (Patents, Copyrights, Trademarks, Franchises, Goodwill) Acquisition cost-purchase price plus all costs (legal and filing fees) to get the asset ready for use. Additional legal fees add to cost. Internally developed-most costs are expensed as incurred (R&D, advertising) and not included in the asset account. Legal fees related to the intangible asset add to the cost of the asset. Goodwill -Recognized (recorded) when a company purchases another business for more than the fair value of the net assets (assets liabilities) acquired. -Indefinite life
Transcribed Image Text:Practice JAX Inc., incurred the following costs associated with the purchase of a piece of land that it will use to re-build an office building: Purchase price for the land Sale of salvage parts already on land Demolition of the old building Groundbreaking ceremony (food & supplies) $300,000 12,000 16,000 2,000 Title insurance 4,000 Real estate agent commissions 3,000 Back taxes on property 2,000 Property taxes due later in the year 3,000 Architect fees for blueprints for new building 15,000 Interest incurred for the first year 9,000 What amount should be recorded to the Land account? S Practice KEV, Inc., purchased a piece of equipment by paying $52,000 cash with a fair value of $54,000. KEV also incurred shipping costs of $600 to get the equipment back to its factory, $300 to get the equipment calibrated and installed, and $1,200 for a one- year maintenance contract. For what amount should KEV record the equipment? $ Natural Resources -Oil, natural gas, timber, etc. INTANGIBLE ASSETS (Patents, Copyrights, Trademarks, Franchises, Goodwill) Acquisition cost-purchase price plus all costs (legal and filing fees) to get the asset ready for use. Additional legal fees add to cost. Internally developed-most costs are expensed as incurred (R&D, advertising) and not included in the asset account. Legal fees related to the intangible asset add to the cost of the asset. Goodwill -Recognized (recorded) when a company purchases another business for more than the fair value of the net assets (assets liabilities) acquired. -Indefinite life
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