Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 11

During the current year, Reddick Corporation incurred the following expenditures which must be recorded either as operating expenses or as intangible assets:
a.xpenditures were made for the training of new employees.he average employee remains with the company for five years, but is trained for a new position every two years.
b.eddick purchased a controlling interest in a vinyl flooring company.he expenditure resulted in the recording of a significant amount of goodwill.eddick expects to earn above-average returns on this investment indefinitely.
c.eddick incurred large amounts of research and development costs in developing a dirt-resistant carpet fiber.he company expects that the fiber will be patented and that sales of the resulting products will contribute to revenue for at least 25 years.he legal life of the patent, however, will be only 20 years.
d.eddick made an expenditure to acquire the patent on a popular carpet cleaner.he patent had a remaining legal life of 14 years, but Reddick expects to produce and sell the product for only six more years.
e.eddick spent a large amount to sponsor the televising of the Olympic Games.eddick's intent was to make television viewers more aware of the company's name and its product lines.
Instructions
Explain whether each of the above expenditures should be recorded as an operating expense or an intangible asset.f you view the expenditure as an intangible asset, indicate the number of years over which the asset should be amortized, if any.xplain your reasoning.