Exam 9: Intangible Assets, goodwill, mineral Resources, and Government Grants

Which of the following is not a characteristic of an intangible asset?

What is economic profit as it would be defined in finance or economics? Why is accounting net income not the same as an economist's determination of earnings,as measured from a shareholder's perspective?

Which statement is not correct?

Which of the following is a difference between intangible assets and property,plant,and equipment (PPE)?

The following transactions occurred in fiscal 2018: • Synthesize Inc.exchanged machinery with Energize Corp. • Synthesize Inc.purchased equipment by signing a 5 year non-interest bearing note payable for $200,000.The implicit rate of interest was 5%. • Synthesize received a government grant of $10,000 to help purchase the equipment. Required: a)Assuming the machinery exchange has commercial substance,prepare the required journal entries for the exchange for both Synthesize and Energize. b)Assuming the machinery exchange does not have commercial substance,prepare the required journal entries for the exchange for both Synthesize and Energize. c)Prepare the required journal entry to record the purchase of the equipment purchased by the non-interest bearing note. d)Prepare the required journal entries to record the government grant using both the gross method and the net method.

Which of the following is not a parameter of amortization?

Xavier Corp capitalized exploration and evaluation costs of $470,000.A further $1,357,000 was spent on tangible property,plant,and equipment to develop an oil well.Reserves at the beginning of the year were 480,000 barrels.During the year,the Corp produced 57,600 barrels of oil. Calculate the amounts for depletion and depreciation.

Kryan Corp.mines and produces aluminum.During 2018,the company explored two new sites and evaluated them for aluminum ore potential.By the December 31,2018 year-end,both sites remained in the evaluation stage.During 2019,evaluation of site Atlanta was completed and the site was deemed to have sufficient quantities of ore;consequently,development of the site began.However,site Blenty was determined to have ore concentrations too low to be commercially viable.The following is the cost of exploration and evaluation incurred on the two sites: Required: Record the journal entries in 2018 and 2019 relating to the exploration and evaluation costs using the full cost method.

Which criteria under IAS 38 would be met if the "project plan outlines the feasibility and timeline of the project"?

Explain how earnings can be manipulated through choices made in the estimated useful lives for intangible assets.

Which of the following is correct with respect to the accounting for re-payment of government grants?

New Ventures Corp. ,a publicly accountable entity,incurred the following costs in its research and development division: At April 30,2018,New Ventures determined that the project was technically feasible and commercially viable.New Ventures had sufficient resources and intentions to complete the project and was confident that there was demand in the marketplace for the product.How much,if any,of the costs can be capitalized for fiscal 2018?

Explain four differences in the recognition of externally acquired intangibles versus internally developed intangibles.

Research Corp. ,a publicly accountable entity,incurred the following costs in its research and development division: At July 31,2018,Research Corp.determined that the project was technically feasible and commercially viable.Research Corp.had sufficient resources and intentions to complete the project and was confident that there was demand in the marketplace for the product.How much,if any,of the costs can be capitalized for fiscal 2018?

Listed below are several transactions that occurred during the year.In each case,all the amounts were debited to an account called "R and D costs." At the end of the year the company wants this account closed out and the amounts either expensed or capitalized to an asset account called "Development costs." a.During the year $5,500,000 was paid to staff to investigate whether a drug combination was effective for reducing a specific type of cancer in mice.Evidence showed it materially reduced the effects of this cancer in the mice. b.During the year $12,000,000 was paid to staff to investigate whether a drug combination was effective for reducing a specific type of cancer for terminally ill cancer patients.The trials were successful in a limited number of cases but the results were mixed. c.During the year $44,000,000 was paid to staff to investigate whether a drug combination was effective in reducing a specific type of cancer.The drug was very successful in most cases.Market research shows a huge market for this drug.The Board has committed further resources to complete the development of this project and to market the drug. d.During the year $41,000,000 was paid to staff to investigate whether a drug combination was effective in reducing a specific type of cancer.The drug combination was very successful in most cases.Market research shows huge a market for this drug combination.The company is too small and does not have adequate funds to complete the balance of the drug testing,so it is looking for a large pharmaceutical firm to take it over and complete the process. Required: Prepare the journal entry required for each case.Explain your proposed treatment.

Which criteria under IAS 38 would be met if the "project has a dedicated group of qualified staff"?

Which statement is correct?

What are the unique features that lead to the differing accounting treatment between research and development costs?

Soorya Resources incurred the following costs: How much would be recorded as depletion expense under the successful efforts method?

GoodResources incurred the following costs: How much would be recorded as depletion expense under the full cost method?