Question

Question 1 /15 View Policies Current Attempt in Progress The following is a list of items that might or might not be classified as intangible assets or goodwill: Goodwill recorded in the purchase of a business Equipment obtained under an operating lease Cost of purchasing a copyright 1 2. 3. Cost of purchasing a trademark 4. Research costs involving tests of chemicals to use in a new medication that has not yet been developed 5. 6 Goodwill generated internally 7. Aircraft acquired using a finance lease 8. Cost of purchasing a patent 9. Legal costs incurred to unsuccessfully defend a patent (see item 8) Development costs incurred to manufacture a sample product that can and will be sold in the future 10. (a) dentify which of the above items would be reported as intangible assets or goodwill on the statement of financial position. 1. 2. 3. 4. 5. 6. 7. 8 9. 10. eTextbook and Media Attempts: 0 of 10 used Save for Later Submit Answer

Answer 1

1. Such Goodwill is the purchased Goodwill and hence to be reported as Goodwill on the statement of financial position.

2. Equipment obtained under an operating lease is neither an Intangible asset nor a goodwill.

3. Cost of purchasing a Copyright is an Intangible asset.

4. Cost of purchasing a Trademark is also an Intangible asset.

5. Such research cost shall be capitalized to the cost of an asset for which it has been incurred and hence not an Intangible asset or goodwill.

6. Goodwill generated internally will be reported as Goodwill.

7. Aircraft acquired under a Finance lease is neither an Intangible asset npr a Goodwill.

8. Cost of purchasing a Patent is to be reported as an Intangible asset.

9. Legal costs incurred for the patent shall be capitalized in the cost of Patent i.e. an Intangible asset.

10. Such development costs are a Research and Development costs that shall be capitalized in the cost of the product for which it has been incurred, hence such costs are neither an Intangible asset nor a Goodwill.