ACCO 211 Activity 52 1. Intangible assets have two main characteristics (1) they lack physical existence, and (2) they are not financial instruments Instructions (a) Explain why intangibles are classified as assets d they have no physical existence. (b) Explain why intangibles are not considered financial instruments 2. Under what circumstances is it appropriate to record goodwill in the accounts? How should goodwill, properly recorded on the books, be written off in accordance with generally accepted accounting principles? 3. Why does the accounting profession make a distinction betwoon internally created intangible assets and purchased intangible assets? 4. What are factors to be considered in estimating the uselul Ide of an intangible asset? 5. A high-speed multiple-bit drill press costing $060,000 has an estmated salvage value of $80,000 and a life of ten years was purchased on April 20 of the current year. What is the annual depreciation for each of the first two years undor the following depreciation methods? Year one, $ b. Year two, 2 Units of production (aclivity) method (letme output is estimated at 110,000 units, the press produced 12,000 unts in year one and 18,000 in year two) a Year one, S 3 Straight-ne depreciation method a Year one, $ a Year b. Year two