Organization costs Purchased trademarks Development phase activities (meet all six development phase criteria) Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of identifiable net assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years Payment for a favourable lease; lease term of 10 years $34,700 18,500 31,500 7,700 81,100 125,300 75,900 14,900 =) Based on the information provided, calculate the total amount for Blossom to report as intangible assets on its statement of financial osition at December 31, 2023. Assume Blossom uses IFRS to prepare its financial statements.

Organization costs Purchased trademarks Development phase activities (meet all six development phase criteria) Deposits with advertising agency for ads to promote goodwill of company Excess of cost over fair value of identifiable net assets of acquired subsidiary Cost of equipment acquired for research and development projects; the equipment has an alternative future use Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years Payment for a favourable lease; lease term of 10 years $34,700 18,500 31,500 7,700 81,100 125,300 75,900 14,900 =) Based on the information provided, calculate the total amount for Blossom to report as intangible assets on its statement of financial osition at December 31, 2023. Assume Blossom uses IFRS to prepare its financial statements.

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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Allocation of Package Purchase Price and Depreciation Methods To expand its business, Small Company paid $954,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Small hired a consultant for $6,000 to appraise the assets. The appraised values were as follows: Property AssessedValue Land $150,000 Building 550,000 Trucks 180,000 Equipment 120,000 Total $1,000,000 Small issued two checks totaling $960,000 to acquire the assets and pay the consultant on July 1. Small depreciated the assets using the straight-line method on the building and on the equipment, and the double-declining balance method on the trucks. Estimated useful lives and salvage values were as follows: Useful Life SalvageValue Building 20 years $42,000 Trucks 4 years 15,000 Equipment 7 years 10,000 a. Calculate the amounts allocated to the various types of plant assets acquired on July 1.…
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ABC Co. is acquiring XYZ Inc. XYZ has the following intangible assets: Customer list with an observable fair value of $45,000 Identifiable research and development costs of $150,000 A 5-year operating lease with favorable terms having a discounted present value of $6,000. Patent on a product that is deemed to have no useful life $15,000. ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?
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Acquisition and retirements Capital lease Goodwill Net income Ownership Property tax Repairs and maintenance Retirement work order Revenue Subsidiary ledger Working papers
And c. Land and d. Factory building journal formal
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up 6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as A. Goodwill to be amortized periodically for 20 yearS. B. Expenses immediately C. Goodwill not subject to amortization but subject to impairment D. Goodwill to be amortized for 40 years 7.Under PFRS 3 (Business Combinations) A. Both direct and indirect costs are to be capitalized B. Both direct and indirect costs are to be expensed C. Direct costs are to be capitalized and indirect costs are to be expensed D. Indirect costs are to be capitalized and direct costs are to be expensed
Trademarks or trade names a. must be renewed every 40 yearsb. can be considered intangibles with indefinite livesc. are developed internally and thus should not have any related costs capitalized andamortizedd. are synonymous with internally developed goodwill
2-Assume that one of your clients asks for your assistance in allocating the $4,500,000 cost of a 100% acquisition of a competitor firm. You estimate the fair value of the net assets on the investee's balance sheet at $3,000,000. However, there is, in addition, an unrecorded trademark valued at $850,000. The intangible asset has an indefinite useful life. Required:a. What amount of goodwill will be recorded?b. What will be the effect of the goodwill and brand name on the annual income statement?c. Now assume that the agreement between the investor and investee calls for an additional payment of $500,000 contingent upon the investee reaching a certain level of income within three years. You estimate the fair value of the potential payment at $400,000. What effect, if any, does the potential payment have on the amount of goodwill recognized?
Subject: accounting