Exam 12: Intangible Assets

Lopez Corp.incurred $420,000 of research costs to develop a product for which a patent was granted on January 2, 2006.Legal fees and other costs associated with registration of the patent totaled $80,000.On March 31, 2011, Lopez paid $150,000 for legal fees in a successful defense of the patent.The total amount capitalized for the patent through March 31, 2011 should be

Contra accounts must be reported for intangible assets in a manner similar to the reporting of property, plant, and equipment.

On January 2, 2011, Klein Co.bought a trademark from Royce, Inc.for $1,000,000.An independent research company estimated that the remaining useful life of the trademark was 10 years.Its unamortized cost on Royce's books was $800,000.In Klein's 2011 income statement, what amount should be reported as amortization expense?

The cost of purchased patents should be amortized over the remaining legal life of the patent.

Amortization of limited-life intangible assets should not be impacted by expected residual values.

The following information is available for Barkley Company's patents: Barkley would record a loss on impairment of

Which of the following costs would be capitalized?

The cost of an intangible asset includes all of the following except

IFRS permits reversals of impairment losses for all limited and indefinite-life intangible assets.

Day Company purchased a patent on January 1, 2010 for $360,000.The patent had a remaining useful life of 10 years at that date.In January of 2011, Day successfully defends the patent at a cost of $162,000, extending the patent's life to 12\31\22.What amount of amortization expense would Kerr record in 2011?

The cost of purchasing patent rights for a product that might otherwise have seriously competed with one of the purchaser's patented products should be

Which of the following research and development related costs should be capitalized and depreciated over current and future periods?

Internally generated goodwill associated with a business may be recorded as an asset when a firm offer to purchase that business unit has been received.

Companies are required to assess the estimated useful life and salvage value of intangible assets at least annually.

A recovery of impairment for an intangible long-lived asset is limited to the carrying value that would have been reported had the impairment not occurred.

Research and development costs that result in patents may be capitalized to the extent of the fair value of the patent.

Purchased goodwill should

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

Use the following information for questions. On January 2, 2011, Lutz Inc.purchased a patent with a cost CHF940,000 a useful life of 4 years.At December 31, 2011, and December 31, 2012, the company determines that impairment indicators are present.The following information is available for impairment testing at each year end: No changes were made in the asset's estimated useful life. -The company's 2012 income statement will report

On August 1, 2011, Li Inc.purchased a license with a cost of HK$5,265,000 and a useful life of 10 years.At December 31, 2013, when the carrying value of the asset was HK$3,992,625, the company determined that impairment indicators were present.The fair less cost to sell the license was estimated to be HK$3,693,200.The asset's value -in-use is estimated to be HK$3,802,5000.Li's 2013 income statement will report Loss on Impairment of