1. What are the two main characteristics of intangible assets?

2. If intangibles are acquired for stock, how is the cost of the intangible determined?

3. Intangibles have either a limited useful life or an indefinite useful life. How should these two different types of intangibles be amortized?

4.Why does the accounting profession make a distinction between internally crested intangibles and purchased intangibles?

5. In 2014, Ghostbusters Corp. spent 5420,000 for goodwill Visits by sales personnel key customers. The purpose of these visits was to build a solid, friendly relationship for the future and to gain insight into the problems and needs of the companies served. How should this expenditure be reported?

6. What are factors to be considered in estimating the useful life of an intangible asset?

7. What should be the pattern of amortization for a limited-life intangible?

8. Columbia Sportswear Company acquired a trademark that is helpful in distinguishing one of its new products. The trademark is renewable every 10 years at minimal cost. All evidence indicates that this trademarked product will generate cash flows for an indefinite period of time.

How should this trademark be amortized?

9. McNabb Company spent 190,000 developing a new process, 45,000 in legal fees to obtain a patent, and 91,000 to market the process that was patented. all in the year 2014.

How should these costs be accounted for in 2014?

10. Izzy Inc. purchased a patent for 350,000 which has an estimated useful life of 10 years. Its pattern of use or consumption cannot be reliably determined. Prepare the entry to record the amortization of the patent in its first year of use.