(a)
Concept Introduction:
The fixed assets are of two types, one is tangible and other is intangible. The intangible assets are those which cannot be touched i.e. no physical presence. The
The effects of amount of impairment of goodwill for the current year on the account and financial statement.
Answer to Problem 7.5.2P
The impairment of goodwill amounts to
Explanation of Solution
Income Statement
for the year ended December
Particulars | | Amount |
Loss from impaired goodwill | |
for the year ended December
| Amount | |
Assets | ||
Goodwill | | |
Liabilities and Stockholder's equity | ||
Stockholder's equity: | ||
Retained earnings | |
(b)
Concept Introduction:
The fixed assets are of two types, one is tangible and other is intangible. The intangible assets are those which cannot be touched i.e. no physical presence. The goodwill, patents, and rights are examples of intangible assets and these are not depreciated but amortized according to their economic life.
The amount of amortization of patent for the current year on the account and financial statement.
Answer to Problem 7.5.2P
The amortization of patent amounts to
Explanation of Solution
Income Statement
for the year ended December
Particulars | | Amount |
Amortization of patents | |
Balance Sheet
for the year ended December
| Amount | |
Assets | ||
Less: Amortization expense from patent | | |
Liabilities and Stockholder's equity | ||
Stockholder's equity: | ||
Retained earnings | |
(c)
Concept Introduction:
The fixed assets are of two types, one is tangible and other is intangible. The intangible assets are those which cannot be touched i.e. no physical presence. The goodwill, patents, and rights are examples of intangible assets and these are not depreciated but amortized according to their economic life.
The amount of depletion of timber rights for the current year on the account and financial statement.
Answer to Problem 7.5.2P
The depletion expenses of rights amount to
Explanation of Solution
Income Statement
for the year ended December
Particulars | | Amount |
Depletion expenses | |
Balance Sheet
for the year ended December
| Amount | |
Assets | ||
Less: Accumulated depletion expenses | | |
Liabilities and Stockholder's equity | ||
Stockholder's equity: | ||
Retained earnings | |
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Chapter 7 Solutions
Survey of Accounting (Accounting I)
- Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.arrow_forwardAlbany Corporation purchased equipment at the beginning of Year 1 for 75,000. The asset does not have a residual value and is estimated to be in service for 8 years. Calculate the depreciation expense for Years 1 and 2 using the double-declining-balance method. Round to the nearest dollar.arrow_forwardOn July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning