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E12-3B (L01,2) (Classification Issues-Intangible Asse) Wiliams Inc. has the following amounts included in its general ledger at the end of the current year Organization costs Trademarks Discount on bonds payable Deposits with advertising agency for ads to promote goodwll of company 130,000 160,000 55,000 30,000 750,000 Exoss of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for reseanch and development projectis; the equipment has an future use Costs of developing a secret formula for a peoduct that is expected to be marketed for at least 20 years 00,000 Instructions (a) On the basis of the information above, compute the total amount to be reported by Williams for intangible assets on its balance sheet at year-end. Equipment has altermative future use (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. E12-4B (L01,2,8) Intangible Amortization) Presented below is selected information for Tartabull Company 1. Tartabull purchased a patent from Vania Co for $3,000,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Tartabull determined that the economic benefits of the patent would not last longer than 7 years from the date of acquisition. What amount should be reported in the bal- ance sheet for the patent, net of accumulated amortization, at December 31, 20177 2. Tartabull bought a franchise from Alexander Co. on January 1,2016, for $900,000. The carrying amount of the franchise on Alexander's books on January 1, 2016, was $600,000. The franchise agreement had an estimated useful life ol 20 years Because Tartabull must enter a competitive bidding at the end of 2025, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 20177 s. On January 1, 2017, Tartabull incurred organization costs of $500,000. What amount of organization expense should be reported in 20177 Tartabull purchased the license for distribution of a popular consumer product on January 1, 2017, for $400,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of s years but by paying a nominal fee, Tartabull can renew the license indefinitely for successive Syear terms. What amount should be amortized for the year ended December 31, 20177 Answer the questions asked about each of the situations. E12-11B (L03) Accounting for Goodwill) Palmet, owner of Palmer Interiors, is negotiating for the punchase of Ruth Inc. The balance sheet of Ruth Inc. is given in an abbreviated form, as follows PALMER INTERIORS BALANCE SHEET As oF DICEMBER 31, 2017 Liabilities and Stockholders' Equity Assets Cash Land Buildings (net) Equipment (net) Copyrights (net) 120,000 240,000 Accouants payable 168,000Long-erm notes payable Total liabdisies 420,000 Common stock Retained earnings Total ansets1380000 Total ibiliasies and stockholders' equity Palmer and Ruth agree that 1 Land is undervalued by $72,000 2 Equipment is overvalued by $12,000. Ruth agrees to sell the business to Palmer for $740,000. Prepare the entry to record the purchase of Ruth Inc. on Palmer's books E12-3B (L01,2) (Classification Issues-Intangible Asse) Wiliams Inc. has the following amounts included in its general ledger at the end of the current year Organization costs Trademarks Discount on bonds payable Deposits with advertising agency for ads to promote goodwll of company 130,000 160,000 55,000 30,000 750,000 Exoss of cost over fair value of net identifiable assets of acquired subsidiary Cost of equipment acquired for reseanch and development projectis; the equipment has an future use Costs of developing a secret formula for a peoduct that is expected to be marketed for at least 20 years 00,000 Instructions (a) On the basis of the information above, compute the total amount to be reported by Williams for intangible assets on its balance sheet at year-end. Equipment has altermative future use (b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. E12-4B (L01,2,8) Intangible Amortization) Presented below is selected information for Tartabull Company 1. Tartabull purchased a patent from Vania Co for $3,000,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Tartabull determined that the economic benefits of the patent would not last longer than 7 years from the date of acquisition. What amount should be reported in the bal- ance sheet for the patent, net of accumulated amortization, at December 31, 20177 2. Tartabull bought a franchise from Alexander Co. on January 1,2016, for $900,000. The carrying amount of the franchise on Alexander's books on January 1, 2016, was $600,000. The franchise agreement had an estimated useful life ol 20 years Because Tartabull must enter a competitive bidding at the end of 2025, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 20177 s. On January 1, 2017, Tartabull incurred organization costs of $500,000. What amount of organization expense should be reported in 20177 Tartabull purchased the license for distribution of a popular consumer product on January 1, 2017, for $400,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of s years but by paying a nominal fee, Tartabull can renew the license indefinitely for successive Syear terms. What amount should be amortized for the year ended December 31, 20177 Answer the questions asked about each of the situations. E12-11B (L03) Accounting for Goodwill) Palmet, owner of Palmer Interiors, is negotiating for the punchase of Ruth Inc. The balance sheet of Ruth Inc. is given in an abbreviated form, as follows PALMER INTERIORS BALANCE SHEET As oF DICEMBER 31, 2017 Liabilities and Stockholders' Equity Assets Cash Land Buildings (net) Equipment (net) Copyrights (net) 120,000 240,000 Accouants payable 168,000Long-erm notes payable Total liabdisies 420,000 Common stock Retained earnings Total ansets1380000 Total ibiliasies and stockholders' equity Palmer and Ruth agree that 1 Land is undervalued by $72,000 2 Equipment is overvalued by $12,000. Ruth agrees to sell the business to Palmer for $740,000. Prepare the entry to record the purchase of Ruth Inc. on Palmer's books

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