Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 9 - Reporting and Analyzing Long-Lived Assets - Exercises: E9-16

Answer

(a) The company depreciates the buildings because the usefulness to the company and revenue producing ability of the asset declines over the asset's useful life. (b) The book value - cost less accumulated depreciation of a building may differ significantly from its market value. If an asset is fully depreciated, it can have zero book value but still have a significant market value. (c) The best example of intangible asset a college campus can have is copyright of the books or research work, it has accomplished. The other intangible asset can be Patent of any new item/ formula invented in the college campus. (d) The examples of Trade mark or trade names are as under:- Wheaties, Monopoly, Sunkist, Kleenex, Coca-cola, Big Mac.

Work Step by Step

If a company purchases the trade mark or trade name, the cost is capitalized and reported in the balance sheet.
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