Consider the following list of costs/expenses/assets and answer the requirements that follow:

1. Orchard Land at cost 2,500,000

2. Orchard trees at FMV less cost to sell (Depreciated Cost/CV P1,800,000)

*Note that the orchard trees can bear oranges for more than one cycle and that the

trees themselves can ultimately be disposed of for mere scrap value only.

1,920,000

3. Partially developed oranges (not yet harvested; at FMV less cost to sell, not

yet included in the value of Orchard trees above)

250,000

4. Corn field at cost 1,900,000

5. Corn plants prior to harvest at depreciated cost (FMV less cost to sell is at

P1,250,000)

1,000,000

6. Timberland at cost 2,200,000

7. Wood trees grown in the timberland prior to harvest at depreciated cost (FMV

less cost to sell is at P1,500,000) 1,200,000

8. Livestock farmland at cost 3,000,000

9. Dairy cattle at depreciated cost (FMV less cost to sell is at P1,600,000) 1,400,000

10. Beef cattle at depreciated cost (FMV less cost to sell is at P1,200,000) 900,000

11. Lease prepayments (6 months rent paid in advance) 60,000

12. Cost of equipment obtained under finance lease 700,000

13. Internally generated brands and mastheads 670,000

14. Separately purchased publishing titles 230,000

15. Internally generated customer list 520,000

16. Purchased recipes and secret formulas from a previous competitor 840,000

17. Costs incurred in the formation of the corporation including pre-operating

costs and operating losses during the start up of the business.

900,000

18. Employee training costs incurred which enhanced their competencies in the

specialized industry the company belongs

950,000

19. Massive advertising costs and promotional campaigns to launch the company,

thus enhancing the company's position in the industry 1,400,000

20. Goodwill internally generated 300,000

21. Total acquisition cost of a business (FMV of identifiable net assets at

P9,500,000)

10,300,000

22. Cost of testing in search/discovery of product alternatives (new knowledge) 165,000

23. Design, construction, and testing of preproduction prototypes and models 223,000

24. Routine, on-going, continuing efforts to refine, enrich, or otherwise, improve

upon the qualities of an existing product

400,000

25. Research and development cost in creating a patented technology 840,000

26. Cost incurred to acquire legal rights and in securing the patent for item 25 270,000

27. Costs of successful legal suit to protect the patent 230,000

28. Cost of purchasing a patent from an inventor 420,000

29. Initial franchise fees 540,000

30. Continuing franchise fees 200,000

31. Cost of purchasing a copyright 900,000

32. Cost of developing a trademark 61,000

33. Computer software for a computer-controlled machine that cannot operate

without that specific software (e.g. an operating system/software of a

computer facility)

220,000

34. Hardware components of the computer facility 780,000

35. Stand-alone or application computer software 370,000

Requirements:

From the list above, determine the following assets:

1. Total PPE (excluding bearer plants)

2. Total Bearer Plants under PAS 16

3. Total Biological Assets and Agricultural Produce under PAS 41

4. Total Intangible Assets (excluding goodwill) under PAS 38

5. Total Goodwill

Answer rating: 100% (QA)

To determine the different categories of assets based on the given list lets analyze each item 1 Orchard Land at cost This falls under Property Plant and Equipment PPE 2 Orchard trees at FMV less cost ... View the full answer