Please provide answer Question:Intangible assets may be internally generated or purchased from anotherparty. In either case, the cost that should be included in the initial valuation ofthe asset is an issue.Instructions:1. Identify the typical costs included in the cash purchase of an intangibleasset.2. Discuss how to determine the cost of an intangible asset acquired in anoncash transaction.3. Describe how to determine the cost of several intangible assetsacquired in a basket purchase. Provide a numerical example involvingintangibles being acquired for a total price of $120,000.

Definition of Intangible Assets:Intangible assets are those assets which have no physical substance…

Answered: Question: Intangible assets may be…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 20DQ

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The cost of property acquired by direct cash purchase includes the cash paid and: A. the implied interest on the debt to finance the purchase.B. the market value of any noncash asset surrendered to acquire the asset.C. the estimated residual value of the asset.D. directly attributable costs of bringing the asset to working condition for its intended use.
An entity that acquires an intangible asset may use the revaluation modelfor subsequent measurement only if A. The useful life of the intangible asset can be reliably determined.B. An active market exists for the intangible asset.C. The cost of the intangible asset can be measured reliably.D. The intangible asset is a monetary asset.
Why is depreciation expense recognized? Select one: a. To provide a better estimate of the market value of the depreciated assets. b. So that the balance sheet value of plant assets will more accurately reflect the replacement cost of the assets. c. To ensure that cash will be available at the end of the assets' useful life in order to replace it. d. To match the cost of the asset against the revenue using a reasonable allocation. method. Save AnswersNext
An intangible asset may be recorded: Select one: a. . at the cost of the asset, which must exclude any additional expenditure required to prepare the asset for use. b. if it is internally generated and fits the definition of an asset and meets the associated recognition criteria. c. if acquired from an external party at a cost. d. at a value other than cost if that value more reliably records the worth of the intangible asset.
Which of the following costs incurred internally to create an intangible asset is generallyexpensed? a. Research and development costs.b. Filing costs.c. Legal costs.d. All of the above.
Which statements are correct concerning measurement of cost of property, plant and equipment?I. The purchase price of an item of property, plant and equipment is the cash price equivalent at the date of recognitionII. If payment is deferred beyond normal credit terms, the difference between the cash price equivalent and total payment is recognized as interest expense over the life of the asset.III. If an item of property, plant and equipment is acquired in exchange for a nonmonetary asset or a combination of monetary and nonmonetary asset, the cost of such item is measured at fair value unless the exchange transaction lacks commercial substance or fair value of either asset received or given up is not reliably determinable.IV. If an entity is able to determine reliably the fair value of both the asset given up and asset received in an exchange, the fair value of the asset given up is used to measure the cost of asset received in exchange.
Explain the difference in the accounting treatment of costs incurred to purchaseintangible assets versus the costs incurred to internally develop intangible assets
Under IFRS, a company that acquires an intangible asset may use the revaluation model for subsequent measurement only if a. The useful life of the intangible asset can be readily determined. b. An active market exists for the intangible asset. c. The cost of the intangible asset can be measured reliably. d. The intangible asset is a monetary asset.
Valuing assets at the amount of cash or equivalents paid or the fair value of the consideration given to acquire them at the time of acquisition most closely describes which measurement of fi nancial statement elements? B . Historical cost.
Which of the following answers is the correct formula for determining the historical cost of an asset? Select one: O a. historical cost = original value of the asset - accumulated depreciation. O b. historical cost = the basic purchase price of the asset minus any other costs necessary to prepare the asset ready for use. O c. historical cost = the basic purchase price of the asset plus any other costs necessary to prepare the asset ready for use. O d. historical cost = the basic purchase price of the asset only.
Explain about the existence of an active market in relation to the intangible assets and the accounting requirement for its valuation
Which of the following values for an intangible asset would a company capitalize and amortize? a.) purchase price b.) research costs c.) residual value d.) development costs

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