Monsecours Corp a public company incorporated on June 28 2013
Monsecours Corp., a public company incorporated on June 28, 2013, setup a single account for all of its intangible assets. The following summary discloses the debit entries that were recorded during 2013 and 2014 in that account:
The new business started up on July 2, 2013. No amortization was recorded for 2013 or 2014. The goodwill purchased on April 1, 2014, includes in-process development costs that meet the six development stage criteria, valued at $175,000. The company estimates that this amount will help it generate revenues over a 10-year period.
(a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as at December 31, 2014, and record any necessary amortization so that all balances are appropriate as at that date. State any assumptions that you need to make to support your entries.
(b) In what circumstances should goodwill be recognized? From the perspective of an investor, does the required recognition and measurement of goodwill provide useful financial statement information?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help