Question
Berton Company reported assets totaling $870,000 as of December 31, 2012. The following information relates to those assets: (a) Breakstone Labs, a rival company, recently
Berton Company reported assets totaling $870,000 as of December 31, 2012. The following information relates to those assets:
(a) Breakstone Labs, a rival company, recently offered to give a $100,000 signing bonus to the head of Berton's fabrication department if she would leave Berton and join Breakstone. She declined. Berton has consequently recorded a long-term asset, "Employees Under Contract," for $100,000.
(b) Berton purchased a patent from a small research firm for $75,000. Subsequent research has shown that the patented technology doesn't work as well as originally thought and the technology actually has no economic use and should be written off as an expense. Berton reports the patent at its original cost of $60,000.
After considering the items above, what should be added or subtracted to the total of Berton's reported assets?
Organize your answer as follows: $870,000 a. + or - b. + or
What is the adjusted assets value after a and b? ____________
c) An independent appraiser recently set Berton's market value at $500,000. This exceeded the book value of equity by $120,000. Accordingly, Berton recorded Goodwill totaling $120,000.
d) Near the end of the year. Berton paid $30,000 for the exclusive right to market electronic equipment to be imported from abroad. Berton reported this as a $30,000 " Intangible Asset,"
e) When Berton started business three years ago, it was required to deposit $5,000 with local electric utlility. The deposit is refundable if Berton cancels electric service. Berton earns no interest on the deposit. The deposit is recorded as an "Other Long Term Asset."
After considering the items above, what should be the total of Bertons reported assets? Organize your answers as follows: Put NA if no adjusting entry is required.
$870,000
a. + or -
b + or -
c. + or -
d. + or -
e. + or -
adjusted total assets are $_________
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