Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 20.8Q
To determine
Accounting changes:
Accounting changes are the alterations made to the accounting methods, accounting estimates, accounting principles (or) the reporting entity.
To find out: The Changes in the accounts of D Incorporation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following statements concerning intangibles is true?
a. a copyright should be considered an intangible with an indefinite lifeb. organization costs must be expensed as incurredc. a patent should be amortized over the shorter of the inventor’s life or its economic lifed. the registration of a trademark or tradename lasts for 20 years and is nonrenewable
On October 1, 2014, PHINEAS Acquired the net assets of FERB which resulted to goodwill. When PHINEAS issued its December 31, 2014 financial statements, the valuation of an acquired trademark was incomplete. PHINEAS used $1,000,000 as provisional fair value of trademarks and determined a 5-year amortization life. PHINEAS appropriately disclosed in its December 31, 2014 financial statements that the trademark was measured at a provisional amount. On April 30, 2015, the valuation of the trademark was finalized. The fair value of the acquisition date amounted to $21,200,000.
How much is the increase (decrease) of the Goodwill in December 31, 2015?
On January 1, 2005, Mambusao Company bought a trademark from Panitan Company
for P6,000,000. Mambusao retained an independent consultant who estimated the
trademark's life to be indefinite. Its carrying amount in Panitan's accounting records
was P4,000,000. In Mambusao's December 31, 2005 balance sheet, what amount
should be reported as trademark?
a.
6,000,000
b.
5,700,000
c.
3,800,000
d.
3,600,000
Chapter 20 Solutions
Intermediate Accounting
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; average cost method...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 Irwin, Inc.,...Ch. 20 - Prob. 20.5BECh. 20 - Book royalties LO204 Three programmers at Feenix...Ch. 20 - Warranty expense LO204 In 2017, Quapau Products...Ch. 20 - Change in estimate; useful life of patent LO204...Ch. 20 - Prob. 20.9BECh. 20 - Error correction LO206 In 2018, internal auditors...Ch. 20 - Prob. 20.11BECh. 20 - Error correction LO206 In 2018, the internal...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change in principle; change in inventory methods ...Ch. 20 - Change from the treasury stock method to retired...Ch. 20 - Change in principle; change to the equity method ...Ch. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Change in principle; change in inventory cost...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in inventory methods; FIFO method to the...Ch. 20 - Change in depreciation methods LO203 For...Ch. 20 - Change in depreciation methods LO203 The Canliss...Ch. 20 - Book royalties LO204 Dreighton Engineering Group...Ch. 20 - Loss contingency LO204 The Commonwealth of...Ch. 20 - Warranty expense LO204 Woodmier Lawn Products...Ch. 20 - Prob. 20.15ECh. 20 - Accounting change LO204 The Peridot Company...Ch. 20 - Change in estimate; useful life and residual value...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Error correction; inventory error LO206 During...Ch. 20 - Error corrections; investment LO206 Required: 1....Ch. 20 - Prob. 20.21ECh. 20 - Prob. 20.22ECh. 20 - Prob. 20.23ECh. 20 - Inventory errors LO206 Indicate with the...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - P 20-2 Change in principle; change in method of...Ch. 20 - Change in inventory costing methods; comparative...Ch. 20 - Change in inventory methods LO202 The Rockwell...Ch. 20 - Change in inventory methods LO202 Fantasy...Ch. 20 - Change in principle; change in depreciation...Ch. 20 - Depletion; change in estimate LO204 In 2018, the...Ch. 20 - Accounting changes; six situations LO201, LO203,...Ch. 20 - Prob. 20.9PCh. 20 - Inventory errors LO206 You have been hired as the...Ch. 20 - Error correction; change in depreciation method ...Ch. 20 - Accounting changes and error correction; seven...Ch. 20 - Prob. 20.13PCh. 20 - Prob. 20.14PCh. 20 - Prob. 20.15PCh. 20 - Prob. 20.16PCh. 20 - Prob. 20.17PCh. 20 - Integrating Case 201 Change to dollar-value LIFO ...Ch. 20 - Prob. 20.2BYPCh. 20 - Prob. 20.3BYPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.5BYPCh. 20 - Prob. 20.6BYPCh. 20 - Analysis Case 208 Various changes LO201 through...Ch. 20 - Analysis Case 209 Various changes LO201 through...Ch. 20 - Prob. 20.10BYPCh. 20 - Prob. 20.11BYPCh. 20 - Prob. 20.12BYPCh. 20 - Prob. 1CCTC
Knowledge Booster
Similar questions
- Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $100,000 related to the purchase. Since that timethe company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $800,000. Blaha estimates that the fair value of Husker is $720,000, of which it allocates $660,000 to Husker, identifiable assets and liabilities. 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be…arrow_forward12. On January 2, 20X0, Earth Company bought a trademark from Mars Company for P600,000. Earth retained an independent consultant, who estimated the trademark’s remaining life to be 20 years. Its amortized cost on Mars’ accounting records was P456, 000. What amount should the trademark be initially recorded?arrow_forwardNovato Inc. went to court this year and successfully defended its patent from infringement by a competitor. The cost of this defense should be charged to a. patents and amortized over the remaining useful life of the patent b. expenses of the period O c. patents and amortized over the legal life of the patent O d. legal fees and amortized over 5 years or lessarrow_forward
- The following five independent questions relate to the GIANTS Co, whose reporting year ends on 12/31. Giants Co developed a trademark internally, incurring the following costs on 1/1/18: Design Registration $282,000 $132,000 $92,000 Research/Development On 1/1/20, Giants Co acquired a trade name for $498,000. At the time of development (1/1/18) and acquisition (1/1/20), Giants Co estimated that the economic life of each asset would be 12 years. On 1/1/24, Giants Co successfully defended the trade name in a legal battle at a cost of $21,700. As a result, the economic life was adjusted to extend through the year 2032. Also on this day, Giants Co has determined that the trademark would have an unlimited capacity to produce cash flows. ** REQUIRED: 1) Determine the following: a) TOTAL amount of amortization expense reported FYE 12/31/23. b) TOTAL amount of amortization expense reported FYE 12/31/24. c) carry value of the Trademark at 12/31/24. d) carry value of the Trade Name at 12/31/24.arrow_forwardProbst Company acquired a trademark several years ago at a cost of $60,000. Probst has never considered the trademark to be impaired. However, at the end of 2019, Probst has determined that the trademark is impaired because of a change in market conditions. It estimates that the trademark has a fair value of $40,000 at the end of 2019. Required: 1. Prepare Probst’s journal entry (if any) to record the impairment of its trademark at the end of 2019. 2. Next Level Assume Probst uses IFRS. If Probst estimates that the cost of selling the trademark is zero but the value-in-use is $45,000, prepare Probst’s journal entry to record the impairment of its trademark at the end of 2019. 3. Assume, instead, that Probst estimated that the trademark had a fair value of $70,000 at the end of 2019. How would Probst account for this if it were using (a) U.S. GAAP or (b) IFRS?arrow_forwardOn January 1, 2014, Aim Company showed patent of P1,920,000 with related accumulated amortization of P240.000. The patent was purchased on January 1,2012 at which date the legal life is 16 years. On January 1, 2014, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2014, in connection with the purchase of a trademark from Cat Company, the parties entered into a noncompetition agreement and a consulting contract. Aim Company paid Cat Company P800,000, of which three-fourths was for the trademark, and one-fourth was for Cat Company's agreement not to compete for a five-year period in the line of business covered by the trademark. Aim Company considered the life of the trademark to be indefinite. Moreover, Aim Company agreed to pay Cat Company P50,000 annually on January 1 of each year for 5 years. What is the total amortization of intangible assets for 2014?arrow_forward
- How long can an accountant present a trademark as an intangible asset on the balance sheet? Five years For the lifetime of the business. Trademarks are renewable every ten years. Twenty years How should R & D be reported on the balance sheet? It depends on the business and its operations. It must be presented as an expense. It must be presented as an asset. It must be presented as a liability. please explain the coreect answerarrow_forward. Last year, Wyeth Company recorded an impairment on an asset held for use. Recent appraisals indicate that the asset has increased in value. Should Wyeth record this recovery in value under GAAP?arrow_forwardA trademark was purchased from Jordan Company for P120,000 on July 1, 20x1. Expenditures forsuccessful litigation in defense of the trademark totaling P30,000 were paid on July 1, 20x4.Management estimates that the useful life of the trademark will be 20 years from the date of acquisition 8. What is the carrying amount of the trademark on December 31, 20x4?arrow_forward
- Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P 800,000 and estimated to have a useful life of 10 years. In 20x3, Alliyah Co. incurred P 100,000 in successfully depending the patent in an infringement suit. However, two months after the suit, the company sold the intangible asset to the plaintiff for P 600,000. It is the company’s policy to recognize full year’s amortization in the year of acquisition and none in the year of derecognition. How much is the gain(loss) on disposal recognized in the company’s 20x3 statement of profit or loss?arrow_forwardBlossom Electric Inc. has the following amounts included in its general ledger at December 31, 2023: 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 Total amount of intangible assets to be reported 18,500 31,500 7,700 81,100 125,300 75,900 14,900 (a) Based on the information provided, calculate the total amount for Blossom to report as intangible assets on its statement of financial position at December 31, 2023. Assume Blossom uses IFRS to prepare its financial statements.arrow_forwardOn January 1, 2009, Jonalyn Company purchased a patent from an original patentee for P2,400,000. The remaining legal life of the patent is 15 years but the useful life is only 12 years. On January 1, 2010, the entity paid P550,000 in successfully defending the patent in an infringement suit filed against the entity. On January 1, 2011, the entity acquired a competing patent for P1,500,000. The competing patent has a remaining legal life 15 years but it is not to be used because it was intended to protect the original patent. Question: What is the carrying amount of the patent on December 31, 2011?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning