Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Question 2E.

Expert-verified
Intermediate Accounting (Kieso)
Found in: Page 639

Short Answer

Presented below is selected information related to Martin Burke Inc. at year-end. All these accounts have debit balances.

Cable television franchises

Film contract rights

Music copyrights

Customer lists

Research and development costs

Prepaid expenses

Goodwill

Covenants not to compete

Cash

Brand names

Discount on notes payable

Notes receivable

Accounts receivable

Investments in affiliated companies

Property, plant, and equipment

Organization costs

Internet domain name

Land

Instructions:

Identify which items should be classified as an intangible asset. For those items not classified as an intangible asset, indicate where they would be reported in the financial statements.

Answer

There are two types of intangible assets: indeterminate and definite. A company's brand name is considered an infinite intangible asset because it stays with the firm for as long as it operates.

See the step by step solution

Step by Step Solution

The following will be classified as an intangible asset:

Cable television franchises

Film contract rights

Music copyrights

Customer lists

Goodwill

Covenants not to compete

Treatment for those items which are not classified as an intangible asset:

Particulars/Items

Treatment

Cash

Current assets

Accounts receivable

Current assets

Notes receivable

Current assets

Prepaid expenses

Current assets

Property, plant, and equipment

Non-current assets

Land

Non-current assets

Investments in affiliated companies

Part of investment section of the balance sheet

Research and development costs

Operating expense

Discount on notes payable

As a deduction from the related notes payable on the balance sheet

Organization costs (start-up costs)

Expense

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.