ABC Co.is acquiring XYZ Inc.XYZ has the following intangible assets:
Patent on a product that is deemed to have no useful life $ \$ 10,000 $.
Customer list with an observable fair value of $ \$ 50,000 $.
A 5-year operating lease with favorable terms having a discounted present value of $ \$ 8,000 $.
Identifiable research and development costs of $ \$ 100,000 $.
ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?
A)$168,000
B)$58,000
C)$158,000
D)$150,000

Question

ABC Co.is acquiring XYZ Inc.XYZ has the following intangible assets: 
Patent on a product that is deemed to have no useful life $ \$ 10,000 $.
Customer list with an observable fair value of $ \$ 50,000 $.
A 5-year operating lease with favorable terms having a discounted present value of $ \$ 8,000 $.
Identifiable research and development costs of $ \$ 100,000 $.
 ABC will record how much for acquired Intangible Assets from the purchase of XYZ Inc?
A)$168,000
B)$58,000
C)$158,000
D)$150,000

Quizplus · Accepted Answer

The total value of XYZ's intangible assets is $208,000 ($100,000 + $40,000 + $68,000). However, ABC Co. will only record acquired intangible assets, which consist of the patent and trademark, with a total value of $158,000 ($100,000 + $58,000).

ABC CoIs Acquiring XYZ Inc $10,000 \$ 10,000 $10,000 Customer List with an Observable Fair Value Of Assets

ABC CoIs Acquiring XYZ Inc $\$ 10,000$
Customer List with an Observable Fair Value Of Assets