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Chapter 5: BE-5-5 (page 239)

Crane Corporation has the following accounts included in its December 31, 2017, trial balance: Equity Investments (trading) \(21,000, Goodwill \)150,000, Prepaid Insurance \(12,000, Patents \)220,000, and Franchises $130,000. Prepare the intangible assets section of the balance sheet.

Short Answer

Expert verified

Total intangible assets of the business entity total $500,000.

Step by step solution

01

Definition of Intangible Assets

The business’s resources that cannot be seen and touched are intangible assets. Even they do not have any physical existence; they provide an inflow of benefits to the business entity.

02

Intangible Asset Section

Particular

Amount $

Goodwill

$150,000

Patent

220,000

Franchises

130,000

Total intangible assets

$500,000

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Most popular questions from this chapter

Discuss at least two situations in which estimates could affect the usefulness of the information in the balance sheet.

The New York Knicks, Inc. sold 10,000 season tickets at $2,000 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?

P5-4 (L03) GROUPWORK (Preparation of a Corrected Balance Sheet) The balance sheet of Kishwaukee Corporation as of December 31, 2017, is as follows.

KISHWAUKEE CORPORATION

Balance Sheet

December 31, 2017

Assets

Goodwill (Note 2)

\(120,000

Building (Note 1)

1,640,000

Inventory

312,100

Land

950,000

Accounts receivable

170,000

Treasury Stock (50,000 shares)

87,000

Cash on hand

175,900

Assets allocated to trustee for plant expansion

Cash in bank

70,000

Debt investment (held to maturity)

138,000

\)3,663,000

Equities

Note payable (Note 3)

\(600,000

Common stock authorized and issue, 1,000,000 shares no par

1,150,000

Retained earnings

103,000

Non-controlling Interest

55,000

Appreciation capital (Note 1)

570,000

Income tax payable

75,000

Reserve for depreciation recorded to the date of building

410,000

\)3,663,000

Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was \(570,000. Depreciation has been recorded based on cost.

Note 2: Goodwill in the amount of \)120,000 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of \(120,000 was credited to Retained Earnings.

Note 3: Notes payable are long-term except for the current installment due of \)100,000.

Instructions

Prepare a corrected classified balance sheet in good form. The notes above are for information only

Lowell Company’s December 31, 2017, trial balance includes the following accounts: Inventory \(120,000, Buildings \)207,000, Accumulated Depreciation—Equipment \(19,000, Equipment \)190,000, Land (held for investment) \(46,000, Accumulated Depreciation—Buildings \)45,000, Land \(71,000, and Timberland \)70,000. Prepare the property, plant, and equipment section of the balance sheet

BE5-9 (L03) Use the information presented in BE5-8 for Adams Company to prepare the long-term liabilities section of the balance sheet.

BE 8: Included in Adams Company’s December 31, 2017, trial balance are the following accounts: Accounts Payable \(220,000, Pension Liability \)375,000, Discount on Bonds Payable \(29,000, Unearned Rent Revenue \)41,000, Bonds Payable \(400,000, Salaries and Wages Payable \)27,000, Interest Payable \(12,000, and Income Taxes Payable \)29,000. Prepare the current liabilities section of the balance sheet.
See all solutions

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