Question

NEED ASAP Please !!!!!! (

TCO C) 1. If intangible assets are acquired for stock, how is the cost of the intangible determined? 2. Explain under what conditions is Goodwill created as an Intangible asset? Give an example. 3. How and under what conditions is Goodwill impaired. 4. What is the total amount to be classified as research and development for 2018 based upon the following costs incurred by the Nelson Corporation: a. Design, construction and testing of preproduction ptototypes & models Cost: $300,000 b. Equipment acquired for use in various R & D Projects (Current and future - 5 year life) $1,000,000 c. Materials used in Research and Development. Cost was 400,000 d. Compensation Costs of personnel in R & D. Cost was 350,000 e. Quality control during commercial production including routine testing of products Costs: $200,000

Answer 1

Answer 1:-

If intangible assets are acquired for stock or in exchange for others assets,the cost of the intangible assets is the fair value of the consideration given or the fair value of the intangible received, whichever is more clearly evident. When several intangibles, or a combination of intangibles and tangible, are bought in a basket purchase. The cost should be allocated on the basis of fair values. Essentially the accounting treatment for purchased intangible closely parallels that followed for purchased tangible assets.