Intangible Assets: These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark, Goodwill , Copyrights. Acquisition Cost: Acquisition cost is the total cost of the asset incurred to obtain an asset. Acquisition cost is also called as historical cost or original cost. To Determine: The cost of the patent acquired by Corporation S in exchange for the common stock of Company N.

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Problem 12-13 (Algo) B Equity method [LO12-6, 12-7] Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling. Inc., on January 2, 2021, for $570 million. At the date of purchase, the book value of Vancouver's net assets was $860 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $10 million for the inventory and by $15 million for the plant facilities The estimated useful life of the plant facilities is 12 years. All inventory acquired was sold during 2021. Vancouver reported net income of $190 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $30 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. What amount should Northwest report…

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Chapter 10, Problem 10.8BE

To determine

Intangible Assets:

These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark, Goodwill, Copyrights.

Acquisition Cost:

Acquisition cost is the total cost of the asset incurred to obtain an asset. Acquisition cost is also called as historical cost or original cost.

To Determine: The cost of the patent acquired by Corporation S in exchange for the common stock of Company N.

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Problem 12-13 (Algo) B Equity method [LO12-6, 12-7] Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling. Inc., on January 2, 2021, for $570 million. At the date of purchase, the book value of Vancouver's net assets was $860 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $10 million for the inventory and by $15 million for the plant facilities The estimated useful life of the plant facilities is 12 years. All inventory acquired was sold during 2021. Vancouver reported net income of $190 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $30 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. What amount should Northwest report…

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