Chapter 12: Q11FRS (page 656)
Question: Where can authoritative IFRS guidance related to intangible assets be found?
Answer
IAS 38 and IAS 36.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Question: Why are held-to-maturity investments applicable only to debt securities?
Explain how the investment account is affected by investee activities under the equity method.
Use the information provided in BE12-7. Assume that the fair value of the division is estimated to be \(750,000 and the implied goodwill is \)350,000. Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill.
Question: As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2017, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below.
Intangible assets | ||||
Debit | Credit | Balance | ||
Jan. 4 | Research and development costs | 940,000 | 940,000 | |
Jan. 5 | Legal costs to obtain patent | 75,000 | 1,015,000 | |
Jan. 31 | Payment of 7 months’ rent on property leased by Bryan | 91,000 | 1,106,000 | |
Feb. 11 | Premium on common stock | 250,000 | 856,000 | |
March 31 | Unamortized bond discount on bonds due March 31, 2037 | 84,000 | 940,000 | |
April 30 | Promotional expenses related to start-up of business | 207,000 | 1,147,000 | |
June 30 | Operating losses for first 6 months | 241,000 | 1,388,000 |
Instructions
Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years.
Indicate how unrealized holding gains and losses should be reported for debt investments classified as trading, available-for-sale, and held-to-maturity.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
