RSM220H1 Chapter Notes - Chapter 12: John Wiley & Sons, Intangible Asset, Income Statement
Document Summary
Exercise 12-3 (10-15 minutes) (a) development phase activities. ,500 (b) excess of cost over fair value of net assets of acquired subsidiary goodwill, ,000, should be shown as a separate line item on the balance sheet. Discount on bonds payable, ,000, should be reported net with the bonds payable in the long-term liabilities section. Deposits with advertising agency for ads to promote goodwill of company, ,000, should be reported either as an expense or as prepaid advertising in the current assets section. Advertising costs in general are expensed when incurred or when first used. Cost of equipment acquired for research and development projects, ,000, should be reported with property, plant, and equipment. Even if it was to be used only with a specific project, because it would be used over a number of periods, it would be capitalized and depreciated as a research and development expense over the period of use.
