Q1: Indicate whether the following items are capitalized or expensed in the current year:

a. Purchase cost of a patent from a competitor.

b. Research costs.

c. Development costs (after achieving economic viability).

d. Costs incurred internally to create goodwill.

Q2: On January 1, 2017, a company purchased copyrights with a cost $2,320,000, a useful life of 5 years. The company uses straight-line depreciation. At December 31, 2018, the company determines that impairment indicators are present. The fair value less costs to sell the copyrights is estimated to be $1,080,000. The copyrights' value-in-use is estimated to be $1,130,000. The asset's remaining useful life is estimated to be 2 years.

(1) The company's 2018 income statement will report Loss on Impairment of:

a. 0.

b. 262,000.

c. 312,000.

d. 1,190,000.

(2) The company's 2019 income statement will report amortization expense for the copyrights of:

a. 377,000.

b. 464,000.

c. 565,000.

d. 1,190,000.

Q3: Noon Corporation purchases a trademark from a company on January 1, 2019, for $54,000. The trademark has a remaining legal life of 16 years. The CEO of Noon feels the trademark will be useful for 10 years. Required: Prepare Noon's journal entries to record the purchase of the trademark and 2019 amortization.

Q4: Presented below is information related to a copyright owned by Patiz Company at December 31, 2019: Cost $8,600,000 Carrying amount 4,300,000 Recoverable amount 3,400,000 Assume that Patiz Company will continue to use this copyright in the future. As of December 31, 2019, the copyright is estimated to have a remaining useful life of 10 years. Required: (a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2019. The company does not use accumulated amortization accounts. (b) Prepare the journal entry to record amortization expense for 2020 related to the copyright. (c) The fair value of the copyright at December 31, 2020, is $3,500,000. Prepare the journal entry (if any) necessary to record the increase in fair value. Q5: On September 1, 2019, Saudi White Cement (SWC) acquired Rio Tinto Enterprises for a cash payment of $700,000. At the time of purchase, Rio Tinto's statement of financial position showed assets of $620,000, liabilities of $200,000, and equity of $420,000. The fair value of Rio Tinto's assets is estimated to be $800,000. Required: Compute the amount of goodwill acquired by SWC