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    Intangibles Assignment - Valix 2017

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    Shinny Jewel Vingno
    The document discusses accounting problems related to goodwill, patents, copyrights, and software development costs. It includes calculations of goodwill amounts from purchase prices and average earnings. It also includes journal entries related to patent amortization, copyright amortization, and capitalization of software development costs.

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    © All Rights Reserved
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    Intangibles Assignment - Valix 2017

    Uploaded by

    Shinny Jewel Vingno
    388 views3 pages
    The document discusses accounting problems related to goodwill, patents, copyrights, and software development costs. It includes calculations of goodwill amounts from purchase prices and average earnings. It also includes journal entries related to patent amortization, copyright amortization, and capitalization of software development costs.

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    INTANGIBLES ASSIGNMENT - VALIX 2017

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    © © All Rights Reserved

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    The document discusses accounting problems related to goodwill, patents, copyrights, and software development costs. It includes calculations of goodwill amounts from purchase prices and average earnings. It also includes journal entries related to patent amortization, copyright amortization, and capitalization of software development costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    388 views3 pages

    Intangibles Assignment - Valix 2017

    Uploaded by

    Shinny Jewel Vingno
    The document discusses accounting problems related to goodwill, patents, copyrights, and software development costs. It includes calculations of goodwill amounts from purchase prices and average earnings. It also includes journal entries related to patent amortization, copyright amortization, and capitalization of software development costs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Shinny Jewel C.

    Vingno
    BSA-2

    Problem 36-1
    1. Purchase price 7,500,000
    Net asset at fair value (4,600,000)
    Goodwill 2,900,000

    2. Cash 50,000
    AR 800,000
    Inventory 1,350,000
    PPE 4,300,000
    Goodwill 2,900,000
    Accounts Payable 900,000
    Note Payable - bank 1,000,000
    Cash 7,500,000

    Problem 36-2
    1. Cash 50,000
    AR 500,000
    Inventory 1,500,000
    Patent 250,000
    PPE 3,000,000
    Total Assets 5,300,000
    Accounts payable (2,000,000)
    Net Assets at FV 3,300,000

    Purchase price 6,000,000


    Net Assets at FV (3,300,000)
    Goodwill 2,700,000

    2. Cash 50,000
    AR 500,000
    Inventory 1,500,000
    Patent 250,000
    PPE 3,000,000
    Goodwill 2,700,000
    Accounts Payable 2,000,000
    Cash 6,000,000
    Shinny Jewel C. Vingno
    BSA-2

    Problem 36-5
    1. 2015 200,000
    2016 230,000
    2017 300,000
    2018 250,000
    2019 270,000
    total 1,250,000
    Divided by: 5
    Average earnings 250,000
    Divided by: Capitalization rate 10%
    Net Assets, including goodwill 2,500,000
    less: Shareholders Equity (1,700,000)
    Goodwill 800,000

    2. Average earnings 250,000


    Normal earnings (1,700,000*8%) (136,000)
    Average excess earnings 114,000
    Divided by: Capitalization rate 15%
    Goodwill 760,000

    3. Average earnings 250,000


    Normal earnings (1,700,000*10%) (170,000)
    Average excess earnings 80,000
    Period 5
    Goodwill 400,000

    4. Average Excess Earnings 80,000


    PV of OA of 1 for 10 years at 12% 5.65
    Goodwill 452,000

    Problem 37-3
    2019 Research and Development expense 250,000
    Cash 250,000

    2020 Patent 60,000


    Cash 60,000
    Amortization of patent (60,000/10) 6,000
    Patent 6,000

    2021 Patent 600,000


    Cash 600,000
    Amortization of patent (654,000/15) 43,600
    Patent 43,600
    Shinny Jewel C. Vingno
    BSA-2

    Original patent 60,000


    New Patent 600,000
    total 660,000
    less: Amortization for 2020 (6,000)
    balance-Jan. 1, 2021 654,000

    2022 Amortization of patent 43,600


    Patent 43,600
    Patent written off 566,800
    Patent 566,800

    Patent, balance, Jan. 1,2021 654,000


    less: Amortization
    2021 43,600
    2022 43,600 87,200
    Unamortized cost 566,800

    Problem 37-8
    1. Amortization of patent 280,000
    Accumulated amortization (1,920,000 - 240,000/6) 280,000

    2. Trademark (800,000*3/4) 600,000


    Noncompetition agreement 200,000
    Cash 800,000
    Amortization of noncompetition agreement 40,000
    Accumulated amortization (200,000/5) 40,000
    3. Royalty expense 50,000
    Cash 50,000

    Problem 37-10
    1. Copyright [300,000-(300,000/5)] 240,000
    Retained earnings 240,000

    2. Amortization of copyright (300,000/5) 60,000


    Copyright 60,000

    Problem 38-12
    1. Duplication of computer software and training materials from product masters(1000 units) 2,500,000
    Packaging product(500 units) 900,000
    Total inventoy 3,400,000

    2. Completion of detailed program design 1,300,000


    Cost incurred for coding and testing to establish technological feasibility 1,000,000
    Cost charge as expensesd outright 2,300,000

    3. Other coding costs after establishment of technological feasibility 2,400,000


    Other testing costs after establishment of technological feasibility 2,000,000
    Cost of producing product masters for training materials 1,500,000
    Capitalized as software cost 5,900,000

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