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aimtobeacpa
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Joined: 10 Dec 2009
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Posted: 12 Oct 2010 at 12:07 \| IP Logged

Johan Co. has an intangible asset, which it estimates will have a useful life of 10 years, while Abco Co. has goodwill, which has an indefinite life. Which company should report amortization in its financial statements?

Johan

Abco

A.

Yes

Yes

B.

Yes

No

C.

No

Yes

D.

No

No

what is the ans for this?..i thought b was correct but wiley cd is showing it incorrect...and it is not showing correct ans..

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aimtobeacpa
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Posted: 12 Oct 2010 at 12:10 \| IP Logged

also this one

Which of the following describes the appropriate accounting for intangible assets with finite useful lives?

< id="Answer" value="18215" name="Answer" ="">A. The cost of the asset is not amortized but is periodically tested for impairment.
< id="Answer" value="18216" name="Answer" ="">B. The cost of the asset is amortized over its useful life and the asset is never tested for impairment.
< id="Answer" value="18217" ="" name="Answer" ="">C. The cost of the asset is amortized over its useful life and the asset is periodically tested for impairment.
< id="Answer" value="18218" name="Answer" ="">D. The cost of the asset is amortized over 40 years.

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jsn123
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Joined: 22 Dec 2009
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Posts: 107

Posted: 12 Oct 2010 at 12:20 \| IP Logged

I believe 'B' is right for the first one bcos goodwill is
not amortized but it is only tested for impairment.

I think 'C' is right for the second one.

aimtobeacpa
Major Contributor

Joined: 10 Dec 2009
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Posts: 657

Posted: 12 Oct 2010 at 12:35 \| IP Logged

ya thanks...even i thought the same...but ans was nt given so wanted to confirm:)

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