Exam 12: Intangible Assets

A cash-generating unit is the smallest identifiable group of assets in a business that can generate cash flow independently of the cash flows from the business's other assets.

Which of the following intangible assets could not be sold by a business to raise needed cash for a capital project?

Recovery of impairment is recognized for all the following except

Factors considered in determining an intangible asset's useful life include all of the following except

Blue Sky Company's 12\31\10 statement of financial position reports assets of $5,000,000 and liabilities of $2,000,000.All of Blue Sky's assets' book values approximate their fair value, except for land, which has a fair value that is $300,000 greater than its book value.On 12\31\10, Horace Wimp Corporation paid $5,100,000 to acquire Blue Sky.What amount of goodwill should Horace Wimp record as a result of this purchase?

Start-up costs include organizational costs, such as legal and state fees incurred to organize a new business entity.These costs should be

January 2, 2008, Koll, Inc.purchased a patent for a new consumer product for $270,000.At the time of purchase, the patent was valid for 15 years; however, the patent's useful life was estimated to be only 10 years due to the competitive nature of the product.On December 31, 2011, the product was permanently withdrawn from the market under governmental order because of a potential health hazard in the product.What amount should Koll charge against income during 2011, assuming amortization is recorded at the end of each year?

Use the following information for questions. On January 1, 2011, Bingham Inc.purchased a patent with a cost €1,160,000, a useful life of 5 years.The company uses straight-line depreciation.At December 31, 2012, the company determines that impairment indicators are present.The fair value less cost to sell the patent is estimated to be €540,000.The patent's value-in-use is estimated to be €565,000.The asset's remaining useful life is estimated to be 2 years. -Bingham's 2012 income statement will report Loss on Impairment of

ELO Corporation purchased a patent for $90,000 on September 1, 2009.It had a useful life of 10 years.On January 1, 2011, ELO spent $22,000 to successfully defend the patent in a lawsuit.ELO feels that as of that date, the remaining useful life is 5 years.What amount should be reported for patent amortization expense for 2011?

Floyd Company purchases Haeger Company for $800,000 cash on January 1, 2011.The book value of Haeger Company's net assets, as reflected on its December 31, 2010 statement of financial position is $620,000.An analysis by Floyd on December 31, 2010 indicates that the fair value of Haeger's tangible assets exceeded the book value by $60,000, and the fair value of identifiable intangible assets exceeded book value by $45,000.How much goodwill should be recognized by Floyd Company when recording the purchase of Haeger Company?

Which of the following is considered research and development costs?

When a new company is acquired, which of these intangible assets, unrecorded on the acquired company's books, might be recorded in addition to goodwill?

Contreras Corporation acquired a patent on May 1, 2010.Contreras paid cash of $25,000 to the seller.Legal fees of $900 were paid related to the acquisition.What amount should be debited to the patent account?

Research and development costs

Periodic alterations to existing products are an example of research and development costs.

Research phase costs are capitalized as an intangible asset once economic viability.

Which of the following principles best describes the current method of accounting for research and development costs?

Hall Co.incurred research and development costs in 2011 as follows: Assume economic viability has not been achieved. The amount of research and development costs charged to Hall's 2011 income statement should be

On January 1, 2007, Russell Company purchased a copyright for $1,000,000, having an estimated useful life of 16 years.In January 2011, Russell paid $150,000 for legal fees in a successful defense of the copyright.Copyright amortization expense for the year ended December 31, 2011, should be

Which of the following legal fees should be capitalized?