Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2020: Organization
Question:
Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2020:
Organization costs ......................................................................................................... $ 34,000
Purchased trademarks ...................................................................................................... 17,500
Development phase activities (meet all six development phase criteria) ................. 29,000
Deposits with advertising agency for ads to promote goodwill of company .............. 8,000
Excess of cost over fair value of identifiable net assets of acquired subsidiary ....... 81,000
Cost of equipment acquired for research and development projects; the equipment has
an alternative future use ............................................................................................... 125,000
Costs of researching a secret formula for a product that is expected to be marketed for
at least 20 years ............................................................................................................... 75,000
Payment for a favourable lease; lease term of 10 years ............................................ 15,000
Instructions
a. Based on the information provided, calculate the total amount for Berrie to report as intangible assets on its statement of financial position at December 31, 2020. Assume Berrie uses IFRS to prepare its financial statements.
b. If an item should not be included in intangible assets, explain the proper treatment for reporting it.
c. Indicate which amounts might be reported differently if ASPE were followed instead of IFRS.
GoodwillGoodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
Step by Step Answer:
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy