Question

The general ledger of Megan Corporation as of December 31, 2016, includes the following accounts:

Copyrights	$ 30,000
Deposits with advertising agency (will be used to promote goodwill)	27,000
Bond sinking fund	70,000
Excess of cost over fair value of identifiable net assets of acquired subsidiary	390,000
Trademarks	120,000

In the preparation of Megan's statement of financial position as of December 31, 2016, what should be reported as total intangible assets? $ Answer

On February 1, 2016, Barnes Corporation purchased a parcel of land as a factory site for $200,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2016. Costs incurred during this period are listed below:

Demolition of old building	$     20,000
Architect's fees	35,000
Legal fees for title investigation and purchase contract	5,000
Construction costs	1,090,000

Salvaged materials resulting from demolition were sold for $10,000.

Barnes should record the cost of the land and new building, respectively, as $ Answer

Answer 1

Solution :

Answer 1.

Total Intangible Assets :

Copyrights	$ 30,000
Excess of cost over fair value of identifiable net assets of acquired subsidiary	$ 390,000
Trademarks	$ 120,000
Total Intangible Assets	$ 540,000

Deposite with advertising agency is an deposit only, it will be either refunded to us or will be adjuted in bills. Bond Sinking Fund is not an intangible assets.

Anwer 2 :

Cost of Land and Building :

	Land	Building
Purchases Price of Land	$ 200,000
Demolition of old building	$ 20,000
Architect's fees		$ 35,000
Legal fees for title investigation and purchase contract	$ 5,000
Construction costs		$ 1,090,000
Salvaged materials resulting from demolition were sold	($ 10,000)
Total Costs	$ 215,000	$ 1,125,000

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