Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.16BE
To determine
To prepare:
Given information:
Purchase price is $750,000.
Estimated value of trademark is $312,000.
Estimated value of customer list is $468,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Smith Company purchased P105,000 of computer equipment from Brown Company. Smith Company paid for the equipment using cash that had been obtained from the initial investment by Connie Smith. The transaction involving the computer equipment should be recorded on the accounting records of which of the following entities?
Smith Company and Brown CompanyBrown CompanySmith Company and Connie Smith's personal recordsBrown Company and Connie Smith's personal records
Lax Company recently acquired two items of equipment. The
transactions are described as follows:
*
*
Acquired a press at an invoice price of P3,000,000 subject to a
5% cash discount which was taken. Costs of freight and
insurance during shipment were P50,000 and installation cost
amounted to P200,000.
Acquired a welding machine at an invoice price of P2,000,000
subject to a 10% cash discount which was not taken. Additional
welding supplies were acquired at a cost of P100,000.
The increase in the equipment account as a result of the above
transactions should be
a. 4,900,000
b. 5,000,000
c. 5,100,000
d. 5,200,000.
Having an issue with this problem.
Thank you
Chapter 11 Solutions
Intermediate Accounting
Ch. 11 - Stephen J. Cosgrove is the Former Vice President....Ch. 11 - Prob. 11.2QCh. 11 - Prob. 11.3QCh. 11 - Prob. 11.4QCh. 11 - Will the expense/capitalization choice impact...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - For a long-lived operating asset acquired by...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Prob. 11.11QCh. 11 - What is the maximum amount of interest to be...Ch. 11 - Prob. 11.13QCh. 11 - Prob. 11.14QCh. 11 - Prob. 11.15QCh. 11 - Do firms expense all costs incurred after the...Ch. 11 - Prob. 11.17QCh. 11 - Prob. 11.18QCh. 11 - When using the double-declining balance...Ch. 11 - Prob. 11.20QCh. 11 - Will a firm recognize a loss on the income...Ch. 11 - Prob. 11.22QCh. 11 - Prob. 11.23QCh. 11 - Prob. 11.24QCh. 11 - Prob. 11.25QCh. 11 - Prob. 11.26QCh. 11 - Prob. 11.27QCh. 11 - Prob. 11.28QCh. 11 - Prob. 11.29QCh. 11 - Prob. 11.30QCh. 11 - Prob. 11.31QCh. 11 - Prob. 11.32QCh. 11 - Prob. 11.33QCh. 11 - Prob. 11.34QCh. 11 - Prob. 11.35QCh. 11 - In a nonmonetary exchange does a firm record the...Ch. 11 - Prob. 11.37QCh. 11 - Prob. 11.38QCh. 11 - Prob. 11.39QCh. 11 - Prob. 11.40QCh. 11 - Prob. 11.1MCCh. 11 - On January 1, Year 1, Bluebird Inc. borrowed 10...Ch. 11 - Prob. 11.3MCCh. 11 - Prob. 11.4MCCh. 11 - Prob. 11.5MCCh. 11 - Prob. 11.6MCCh. 11 - Prob. 11.7MCCh. 11 - Prob. 11.8MCCh. 11 - Determining Acquisition Cost. Haply, Inc. incurred...Ch. 11 - Determining Acquisition Cost. Tarpley, Inc....Ch. 11 - Prob. 11.3BECh. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Prob. 11.7BECh. 11 - Prob. 11.8BECh. 11 - Depreciation, Straight-Line Method. Hermit...Ch. 11 - Prob. 11.10BECh. 11 - Prob. 11.11BECh. 11 - Prob. 11.12BECh. 11 - Prob. 11.13BECh. 11 - Derecognition Due to Abandonment. Greene Corp....Ch. 11 - Prob. 11.15BECh. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - Prob. 11.18BECh. 11 - Prob. 11.19BECh. 11 - Prob. 11.20BECh. 11 - Leasehold Improvements. At the beginning of its...Ch. 11 - Determining Acquisition Cost. St Charles Flooring...Ch. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Capitalization of Interest, Specific and General...Ch. 11 - Prob. 11.11ECh. 11 - Expensing versus Capitalizing ExpendituresAnalysis...Ch. 11 - Depreciation Methods, Disposal. Kurtis Koal...Ch. 11 - Prob. 11.14ECh. 11 - Depreciation Methods, Partial-Year Depreciation....Ch. 11 - Prob. 11.16ECh. 11 - Depreciation Methods. Ace Manufacturing, Inc....Ch. 11 - Prob. 11.18ECh. 11 - Depreciation Methods, Partial-Year Depreciation,...Ch. 11 - Prob. 11.20ECh. 11 - Partial-Year Depreciation, Sale of Property,...Ch. 11 - Prob. 11.22ECh. 11 - Disclosure of Property, Plant, and Equipment. Use...Ch. 11 - Disclosure of Property, Plant, and Equipment,...Ch. 11 - Prob. 11.25ECh. 11 - Research and Development Activities. During the...Ch. 11 - Prob. 11.27ECh. 11 - Goodwill Computation, Acquisition of Intangibles,...Ch. 11 - Prob. 11.29ECh. 11 - Prob. 11.30ECh. 11 - Prob. 11.31ECh. 11 - Prob. 11.32ECh. 11 - Prob. 11.33ECh. 11 - Prob. 11.34ECh. 11 - Prob. 11.35ECh. 11 - Prob. 11.36ECh. 11 - Prob. 11.37ECh. 11 - Exchanges Lacking Commercial Substance, Cash...Ch. 11 - Prob. 11.39ECh. 11 - Prob. 11.41ECh. 11 - Prob. 11.42ECh. 11 - Note Payable Exchanged for a Plant Asset (Deferred...Ch. 11 - Prob. 11.2PCh. 11 - Prob. 11.3PCh. 11 - Depreciation Methods and Depreciation Schedules....Ch. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Goodwill and Bargain Purchase Computations. The...Ch. 11 - Prob. 11.8PCh. 11 - Prob. 11.9PCh. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Judgment Case 1: Property, Plant, and Equipment:...Ch. 11 - Prob. 2JCCh. 11 - Prob. 1FSACCh. 11 - Surfing the Standards Cases Surfing the Standards...Ch. 11 - Prob. 2SSCCh. 11 - Surfing the Standards Case 3: Involuntary...Ch. 11 - Prob. 4SSCCh. 11 - Prob. 5SSCCh. 11 - Prob. 6SSCCh. 11 - Prob. 1BCCCh. 11 - Prob. 2BCC
Knowledge Booster
Similar questions
- Buchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanans journal entry to record the purchase of McLaren? C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren?arrow_forwardFarm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?arrow_forward2. Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. a. What is the amount of goodwill in this transaction? b. What is Farm Fresh Agriculture Company's journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?arrow_forward
- Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. What journal entry is required for each situation ? The equipment was purchased on account for $25,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. Connors gave the seller a noninterest-bearing note. The note required payment of $27,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 10% properly reflects the time value of money in this situation. Connors traded in old equipment that had a book value of $6,000 (original cost of $14,000 and accumulated depreciation of $8,000) and paid cash of $22,000. The old equipment had a fair value of $2,500 on the date of the exchange. The exchange has commercial substance. Connors issued 1,000 shares of its no-par common stock…arrow_forwardDonner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $220,000. The Focus Company initially offered to buy the land for $177,000. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $232,000. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?arrow_forwardSandhill Ltd. purchased several intangible assets, as follows: Asset Licences Customer lists (a) The following information is also available: Asset Licences Purchase Cost Customer lists Patents Copyrights $80,000 In addition to the costs listed above, there were legal fees of $15,100 associated with the licence acquisitions. The licences are valid in perpetuity, and sales of the products produced under the licences have been strong and are expected to continue at the same level for many decades. The customer lists are expected to be useful for the next six years. The patent has a legal life of 20 years, but technological changes are expected to render it worthless after about 8 years. The copyright is good for another 40 years, but nearly all the related sales are expected to occur during the next 10 years. $ 60,300 Calculate the annual amortization expense, if any, that should be recorded for each of these intangible assets, assuming the straight-line method is appropriate. (Do not…arrow_forward
- Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. 1. The equipment was purchased on account for $25,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. 2. Connors gave the seller a noninterest-bearing note. The note required payment of $27,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 10% properly reflects the time value of money in this situation. 3. Connors traded in old equipment that had a book value of $6,000 (original cost of $14,000 and accumulated depreciation of $8,000) and paid cash of $22,000. The old equipment had a fair value of $2,500 on the date of the exchange. The exchange has commercial substance. 4. Connors issued 1,000 shares of its nopar common stock in exchange for the equipment. The market…arrow_forwardConnors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. 1. The equipment was purchased on account for $30,000. Credit terms were 3/10, 1/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. 2. Connors gave the seller a noninterest-bearing note. The note required payment of $32,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 12% properly reflects the time value of money in this situation. 3. Connors traded in old equipment that had a book value of $8,500 (original cost of $19,000 and accumulated depreciation of $10,500) and paid cash of $27,000. The old equipment had a fair value of $4,500 on the date of the exchange. The exchange has commercial substance. 4. Connors issued 1,500 shares of its no-par common stock in exchange for the equipment. The market…arrow_forwardJeremiah Corporation has provided the following information on intangible assets as follows: a. A patent was purchased from Isaiah Company for P5,000,000 on January 1, 20x1. On the acquisition date, the patent was estimated to have a useful life of 10 years. The patent had a net book value of P5,000,000 when Isaiah sold it to Jeremiah. b. On February 2, 20x2, a franchise was purchased from Daniel Company for P2,160,000. The contract that runs for 20 years provides that 5%of revenue from the franchise must be paid to Daniel. Revenue from the franchise for 20x2 was P8,000,000. c. Jeremiah incurred the following research and development costs in 20x2: Materials and equipment P462,000 657,000 329,000 P1,448,000 Personnel Indirect costs Total Because of the recent events, Jeremiah, on January 1, 20x2, estimates that the remaining useful life of the patent purchased on January 1, 20x1, is only five (5) years from January 1, 20x2. 1. On December 31, 20x2, the carrying value of the patent…arrow_forward
- Jeremiah Corporation has provided the following information on intangible assets as follows:a. A patent was purchased from Isaiah Company for P5,000,000 on January 1, 20x1. On the acquisitiondate, the patent was estimated to have a useful life of 10 years. The patent had a net book value ofP5,000,000 when Isaiah sold it to Jeremiah.b. On February 2, 20x2, a franchise was purchased from Daniel Company for P2,160,000. The contractthat runs for 20 years provides that 5%of revenue from the franchise must be paid to Daniel. Revenuefrom the franchise for 20x2 was P8,000,000.c. Jeremiah incurred the following research and development costs in 20x2:Materials and equipment P462,000Personnel 657,000Indirect costs 329,000Total P1,448,000Because of the recent events, Jeremiah, on January 1, 20x2, estimates that the remaining useful life of thepatent purchased on January 1, 20x1, is only five (5) years from January 1, 20x2.1. On December 31, 20x2, the carrying value of the patent should be…arrow_forwardBuchanan Imports purchased McLaren Corporation for $5,000,000 cash when McLaren had net assets worth $4,500,000. A. What is the amount of goodwill in this transaction? B. What is Buchanan's journal entry to record the purchase of McLaren? If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. C. What journal entry should Buchanan write when the company internally generates additional goodwill in the year following the purchase of McLaren? If no entry is required, select "No entry required" and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. 88 00 00 %24arrow_forwardFrostFrost Enterprises buys a warehouse for $ 530 comma 000$530,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $ 580 comma 000$580,000 for the warehouse. The seller had originally purchased the building for $ 520 comma 000$520,000. FrostFrost has a similar warehouse on the West Coast that has a book value of $ 544 comma 000$544,000. Under the historical cost principle, FrostFrost should record the building forarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College