I just need the answers please Gigantic Company buys 100 percent of the outstand

Question

I just need the answers please

Gigantic Company buys 100 percent of the outstanding company stock of Small Company Gigantic paid a considerable amount tor this new company a number of intangible assets of value that it had not previously recorded. Gigantic is attempting to determine which of these intangible assets must be identified and recorded in consolidated financial statements. Small has expended $4 million on research and development projects in recent years. Many of those have proven worthless but a few are now considered to be quite valuable. Although none of these research and development projects have yet reached the stage of technological feasibility, they are still considered to be worth $7 million at the time of the acquisition. What reporting is made of these in process which indicated that Small had research and development projects? Question 5 options A) $4 million is recorded on the consolidated statements as an expense B) $4 million is recorded on the consolidated statements as an asset. C) $7 million is recorded on the consolidated statements as an expense D) $7 million is recorded on the consolidated statements as an asset. Question 6 (7 points) Hugo Corporation has acquired a number of other companies over the years. As a result, one of its reporting units (its plastics division) has reported goodwill of S600,000. Hugo is currently making its annual test to determine if goodwill has possibly been impaired. The plastics division has a book value of $4 million but a fair value of only $4.1 million. At that date, that division has the following assets and no liabilities: land (book value of S1 million and fair value of S1.3 million), buildings (net book value of S2 million and fair value of $2.2 million), equipment (net book value of $400,000 and fair value of $500,000), and goodwill (book value of S600,000 but fair value is not known). What loss should be recognized in connection with the impaired value of the goodwill? Duestion 6 options C Zero $100,000 $500,000 $600,000

Explanation / Answer

question5) the company incurred reserch and development expense unlexpenditure recorded as a expenses unless otherwise it proven to be worth and must generate cash flow from the reserch and devlopment so in this small company case total expenses recorded as a expense.i.e 4 million recorded as a expense in consolidated financila sttements

question6) zero because book value of good will is zero

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---