LO 11.1Define intangible assets.
LO 11.1What is goodwill, and how is it generated?
LO 11.2For each of the following transactions, state whether the cost would be capitalized (C) or recorded as an expense (E).
- Purchased a machine, $100,000; gave long-term note
- Paid $600 for ordinary repairs
- Purchased a patent for $45,300 cash
- Paid $200,000 cash for addition to old building
- Paid $20,000 for monthly salaries
- Paid $250 for routine maintenance
- Paid $16,000 for major repairs
LO 11.2What amounts should be recorded as a cost of a long-term asset?
LO 11.3Define natural resources.
LO 11.4Explain the differences between the process of amortizing intangible assets and the process of depreciating tangible assets.
LO 11.5What are some examples of special issues in accounting for long-term assets? How are they handled?