Question - Classification Issues-Intangible Asset its general ledger at December 31, 2010.
Organization costs 24,000
Trademarks 20,000
Discount on bonds payable 35,000
Deposits with advertising agency for ads to promote goodwill of company 10,000
Excess of cost over fair value of net identifiable assets of acquired subsidiary 75,000
Cost of equipment acquired for research and development projects; the equipment has an alternative future use 90,000
Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 70,000
Instructions -
A) On the basis of the information above, compute the total amount to be reported by Langrova for intangible assets on its balance sheet at December 31, 2010. Equipment has alternative future use.
B) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes.