ACCT 551 help A Guide to career/uophelp.com ACCT 551 help A Guide to career/uophelp.com | Seite 18

$274,500
$285,500
$258,050
$255,000
Question 1. (TCO C) Barkley Corp. obtained a trade name in January
2009, incurring legal costs of $15,000. The company amortizes the trade
name over 8 years. Barkley successfully defended its trade name in
January 2010, incurring $4,900 in legal fees. At the beginning of 2011,
based on new marketing research, Barkley determines that the fair value
of the trade name is $12,000. Estimated total future cash flows from the
trade name are $13,000 on January 4, 2011.
Instructions:
Prepare the necessary journal entries for the years ending December 31,
2009, 2010, and 2011. Show all computations.
Question 2. (TCO C) It has been argued on the grounds of conservatism
that all intangible assets should be written off immediately after
acquisition. Discuss the accounting arguments against this treatment.
Question 3. (TCO D) Edwards Co. includes one coupon in each bag of
dog food it sells. In return for four coupons, customers receive a dog toy
that the company purchases for $1.20 each. Edward’s experience
indicates that 60% of the coupons will be redeemed. During 2010,
100,000 bags of dog food were sold, 12,000 toys were purchased, and
40,000 coupons were redeemed. During 2011, 120,000 bags of dog food
were sold, 16,000 toys were purchased, and 60,000 coupons were
redeemed.