MUHASEBE II - Deneme Sınavı - 8

Buildings are tangible assets.

Intangible assets are a unique kind of non-current assets that provide certain legal rights, privileges, and competitive advantages to the business.

They are reported under non-current assets section of balance sheet. Other statements are true for intangible assets.In addition, intangible assets have distinctive qualifications from other assets that require them to be recorded as intangible asset. These are; • They have a value for a specific company • Some of them have unlimited life • Their values fluctuate highly because their benefits are based on competition.

The initial cost for an intangible asset includes only the purchase price.

The process of allocating the cost of an intangible asset to expense over its useful life is referred to amortization.

Rights consist of patents, licenses, trademarks, franchises and copyrights. Goodwill means different things to different people. Generally, it refers to a company’s good reputation and intangible assets of a business that is created from favorable attributes that relate to a company and are not attributable to any other specific asset. These include managerial skills, desirable location, good customer relations, skilled employees, high-quality products, and good relations with labor unions. A good reputation may create goodwill, but that company cannot record goodwill for its own business.

Trademarks are assets that represent distinctive identifications of products or services.

Goodwill is the value paid above the net worth of the company’s assets and liabilities.

Intangible assets are usually reported in the balance sheet in a separate section following Property, Plant and Equipment assets. The balance of each class of intangible assets should be disclosed on the balance sheet at their book value (cost less accumulated depreciation) either in the face of the statement or the notes. Intangibles do not usually use a contra asset account like the contra asset account Accumulated Depreciation used for plant assets. Instead, companies record amortization of intangibles as a direct decrease (credit) to the asset account.

Depletion per Unit=(Cost- Residual Value) /  Total Estimated Units Available

Depletion Expense=Depletion per Unit x Yearly Extracted Quantity

1,000,000 / 25,000,000  = 0.04 per unit

0.04 x 1,200,000 =48,000 TL

The correct answer is question E. All assets given in the options are intangible assets.

Goodwill is not subject to a decreasing book value through depreciation, depletion, or amortization.

The correct answer is question E. An intangible asset is both long term and nonphysical.

Companies normally use the straight-line method for amortizing intangible assets.

According to the information given in the question patents account is 10.000 debit and cash is 10.000 credit.

Amortization Expense=3.500.000X(1/5)=700.000

Leasehold Improvements account is only used for rented assets.

Depletion - Depreciation - Amortization should be brought to the places left blank in the question.

Depletion per unit= =30.000/500.000= 0.06 Ton
Depletion Expense =0.06 x 450.000 tons= 27.000 TL

Intangible assets are usually reported in the balance sheet in a separate section following Property, Plant and Equipment assets. The correct answer is B.