Instructions for the Microsoft Excel Templates by Rex A Schildhouse

Be advised, the template workbooks and worksheets are not protected. Overtyping any data may remove it.
Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text. You should enter your name, date, instructor's name, and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires more than one page. Each template is set to print with File Name, Page # of # Page(s), the print date, and the print time to assist in assembly of multiple pages. If more than one page is required by the template, manual page breaks have been set to provide consistent presentation. All of the cells have been correctly formatted for presentation and should not require any adjustment. For example, if the text requires one, two, or three significant digits in a presentation, the template has been set for that presentation in the appropriate cells. In general, the yellow highlighted cells are the cells which work and effort should be presented. These entries may include date(s), account title(s), values, memorandum appropriate to the entry, or text answers to questions. And information or data which may be required by the solution will be entered in cells with borders to help identify them. Where a yellow highlighted cell shows "Date" enter the appropriate date for that step of the challenge. This may be any date format that Microsoft Excel accepts. Some of these formats include "1/1/12", "01/01/12", and "01/01/2012." All of these will return January 01, 2012, in the format set in the template. Where a yellow highlighted cell shows "Acct Nbr" enter the appropriate account number, provided in the template and in the text for that step of the challenge. This is entry may be a "Look to" formula to another cell where that information has been provided or previously entered. Where a yellow highlighted cell shows "Account Title" enter the appropriate account title for that step of the challenge. This is a text entry and most of those cells are set for the proper indentation for that step. Frequently the chart of accounts appropriate to the challenge is provided and you can use the "look to" formula to reference the appropriate account title without typing it. Check with your instructor to see if abbreviated account titles are acceptable. For example "A/R" for Accounts Receivable, "A/P" for Accounts Payable. If your instructor is using a comparison process between workbooks for grading, these abbreviates may not be acceptable. Where a yellow highlighted cell shows titles such as "Values," "Amounts," or "Quantities" enter the appropriate numerical value for that step of the challenge. The cell is formatted for proper presentation of the entered information. If a dollar sign is appropriate, it should not be entered, Microsoft Excel will place it there through formatting. Commas and significant digits (decimals) are also set through formatting for common presentation. Since the formatting of the templates is not protected by any password, you may change any of the formatting found in the templates to meet your desires. Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel.

Where a yellow highlighted cell shows titles such as "Formula" you may enter the appropriate formula or enter a numerical value appropriate for that step of the challenge. Most of the values necessary for the appropriate formula are located on the template in cells with borders or in other yellow highlighted cells. The formula may be a simple "Look to" formula, an equal sign and a cell reference, "=E27" or more complex as "=E27*5," or something similar to the time-value-of-money formula. These are addressed in the tutorial text provided for Microsoft Excel. Where a yellow highlighted cell shows "Text" enter the appropriate text for that step of the challenge. This may be a memorandum entry for a journal entry or a lengthy text answer discussing the results of an analysis of a company's financials. These titles can simply be typed over. Where a yellow highlighted cell shows titles such as "Journal Number" or "Journ #" you should enter the appropriate number provided in the template and in the text for that step of the challenge. In general this will appear in instances such as "Record the following events in General Journal number six." The print area is defined to fit onto 8 1/2" 11" sheets in portrait or landscape mode as required. Margins are generally set to no less than 1/2" so most printers can print them without a problem. If you printer cannot accept margins less than 1" you may have to reformat the margins through Page Setup. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. This can be removed by utilizing the View menu and selecting "Unfreeze Panes" under "Freeze Panes." When negative values are required, enter them by starting with a minus sign, "-". Negative values may be shown as ($400) or -$400. Negative values in formulas can be created by putting a minus sign in front of the cell reference - "=E10*-E11" will return a negative value if both cells E10 and E11 contain positive values. Microsoft Office and Microsoft Excel are products of, and copyrighted by, Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E12-3 (Classification IssuesIntangible Asset) Langrova Inc. has the following amounts included in its general ledger at December 31, 2012. Organization costs $24,000 Trademarks $20,000 Discount on bonds payable $35,000 Deposits with advertising agency for ads to promote goodwill $10,000 of company Excess of cost over fair value of net identifiable assets of acquired $75,000 subsidiary Cost of equipment acquired for research and development projects; $90,000 the equipment has an alternative future use Costs of developing a secret formula for a product that is expected $70,000 to be marketed for at least 20 years Instructions: (a) On the basis of the information above, compute the total amount to be reported by Langrova for intangible assets on its balance sheet at December 31, 2012. Equipment has alternative future use. Trademarks Excess of cost over fair value of net assets of acquired subsidiary (goodwill) Total intangible assets $20,000 $75,000 $95,000

(b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. Organization costs, $24,000, should be expensed. Discount on bonds payable, $35,000, should be reported as a contra account to bonds payable in the long-term liabilities section.

Deposits with advertising agency for ads to promote goodwill of company, $10,000, should be reported either as an expense or as prepaid advertising in the current assets section. Advertising costs in general are expensed when incurred or when first used.

Cost of equipment acquired for research and development projects, $90,000, should be reported with property, plant, and equipment, because the equipment has an alternative use.

Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years, $70,000, should be classified as research and development expense on the income statement.

153010910.xlsx.ms_office, Exercise 12-3 Solution, Page 3 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E12-3 (Classification IssuesIntangible Asset) Langrova Inc. has the following amounts included in its general ledger at December 31, 2012. Organization costs $24,000 Trademarks $20,000 Discount on bonds payable $35,000 Deposits with advertising agency for ads to promote goodwill $10,000 of company Excess of cost over fair value of net identifiable assets of acquired $75,000 subsidiary Cost of equipment acquired for research and development projects; $90,000 the equipment has an alternative future use Costs of developing a secret formula for a product that is expected $70,000 to be marketed for at least 20 years Instructions: (a) On the basis of the information above, compute the total amount to be reported by Langrova for intangible assets on its balance sheet at December 31, 2012. Equipment has alternative future use. Text Title Text Title Text Title Amount Amount Formula

(b) If an item is not to be included in intangible assets, explain its proper treatment for reporting purposes. Enter text answer as appropriate here.

Enter text answer as appropriate here.

Enter text answer as appropriate here.

Enter text answer as appropriate here.

153010910.xlsx.ms_office, Exercise 12-3, Page 4 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E12-6 (Recording and Amortization of Intangibles) Powerglide Company, organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012. 01/02/2012 Purchased patent, 8 year life $380,000 04/01/2012 Purchased goodwill, indefinite life $360,000 10 year life, 07/01/2012 Purchased franchise with expiration date 7/1/20 $450,000 08/01/2012 Payment of copyright, 5 year life $156,000 09/01/2012 Research and development costs $215,000 $1,561,000 Instructions: Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2012, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.) Patents Goodwill Franchises Copyrights Research and Development Expense Intangible Assets Amortization Expense Patents [($380,000 / 8) Franchises [($450,000 / 10) 6/12] Copyrights [($156,000 / 5) 5/12] Balance of Intangible Assets as of December 31, 2012 Patents ($380,000 - $47,500) Goodwill (No amortization) Franchises ($450,000 - $22,500) Copyrights ($156,000 - $13,000) $332,500 360,000 427,500 143,000 380,000 360,000 450,000 156,000 215,000 1,561,000 83,000 47,500 22,500 13,000

153010910.xlsx.ms_office, Exercise 12-6 Solution, Page 5 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
E12-6 (Recording and Amortization of Intangibles) Powerglide Company, organized in 2011, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2012. 01/02/2012 Purchased patent, 8 year life $380,000 04/01/2012 Purchased goodwill, indefinite life $360,000 10 year life, 07/01/2012 Purchased franchise with expiration date 7/1/20 $450,000 08/01/2012 Payment of copyright, 5 year life $156,000 09/01/2012 Research and development costs $215,000 $1,561,000 Instructions: Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2012, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.) Account Title Account Title Account Title Account Title Account Title Account Title Account Title Account Title Account Title Account Title Balance of Intangible Assets as of December 31, 2010 Account Title Account Title Account Title Account Title Formula Formula Formula Formula Amount Amount Amount Amount Amount Formula Formula Formula Formula Formula

153010910.xlsx.ms_office, Exercise 12-6, Page 6 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P12-2 (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. Date: 2003-2004 Jan. 2005 March 2005 Jan. 2006 Nov. 2007 Dec. 2008 April 2009 July 2013 Activity: Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2006 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Cost: $384,000 87,600 42,000 59,500 81,500 42,000 43,000 34,000

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2011, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Instructions: (a) Compute the carrying value of patent No. 758-6002-1A on December 31, 2006. Costs to obtain patent Jan. 2006 2006 amortization ($59,500 / 17 years) Carrying value, 12/31/06 $59,500 3,500 $56,000

All costs incurred prior to January 2006 are related to research and development activities and were expensed as incurred in accordance with GAAP.

153010910.xlsx.ms_office, Problem 12-2 Solution, Page 7 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: th (b) Compute the Accounting carrying value of patent No. by 758-6002-1A on December 31, 2010. Intermediate , 14 Edition Kieso, Weygandt, and Warfield
Carrying value of patent, Jan. 1, 2007 Amortization 2007 Amortization 2008 Legal fees to defend patent Dec. 2008 Carrying value, Dec. 31, 2008 Amortization 2009 Amortization 2010 Carrying value, Dec. 31, 2010 $56,000 3,500 3,500 (7,000) 49,000 42,000 91,000 (13,000) $78,000

6,500 6,500

The costs incurred in 2007 and 2009 are related to research and development activities and are expensed as incurred.

(c) Compute the carrying value of patent No. 758-6002-1A on December 31, 2013. Carrying value Jan 1, 2011 Amortization 2011 ($78,000 / 5 years) Amortization 2012 Amortization 2013 Carrying value, Dec 31, 2013 $78,000 $15,600 15,600 15,600

(46,800) $31,200

The legal costs in 2013 were expensed because the suit was unsuccessful.

153010910.xlsx.ms_office, Problem 12-2 Solution, Page 8 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th Intermediate Accounting, 14 Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P12-2 (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. Date: 2003-2004 Jan. 2005 March 2005 Jan. 2006 Nov. 2007 Dec. 2008 April 2009 July 2013 Activity: Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2006 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Cost: $384,000 87,600 42,000 59,500 81,500 42,000 43,000 34,000

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2011, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Instructions: (a) Compute the carrying value of patent No. 758-6002-1A on December 31, 2006. Costs to obtain patent Jan. 2006 Text title Text title Amount Amount Formula

153010910.xlsx.ms_office, Problem 12-2, Page 9 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: th (b) Compute the Accounting carrying value of patent No. by 758-6002-1A on December 31, 2010. Intermediate , 14 Edition Kieso, Weygandt, and Warfield
Carrying value of patent, Jan. 1, 2007 Text title Text title Legal fees to defend patent Dec. 2008 Text title Text title Text title Text title Text answer as appropriate. Formula Formula Formula Formula Formula Amount Formula Formula Formula

Formula Formula

(c) Compute the carrying value of patent No. 758-6002-1A on December 31, 2013. Carrying value Jan. 1, 2011 Text Title Text Title Text Title Text Title Text answer as appropriate. Amount Formula Formula Formula

Formula Formula

153010910.xlsx.ms_office, Problem 12-2, Page 10 of 12, 6/20/2013, 6:59 AM

Solution Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P12-5 (Goodwill, Impairment) On July 31, 2012, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita reported the following balance sheet at the time of the acquisition. Current assets $800,000 Current liabilities $600,000 Noncurrent assets $2,700,000 Long-term liabilities $500,000 Total assets $3,500,000 Stockholders equity $2,400,000 Total liabilities and stockholders equity $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,750,000 Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2012, Conchita reports the following balance sheet information. Current assets $450,000 Noncurrent assets (including goodwill recognized in purchase) $2,400,000 Current liabilities ($700,000) Long-term liabilities ($500,000) Net assets $1,650,000 $1,850,000 The recorded It is determined that the fair value of the Conchita Division is amount for Conchitas net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value above the carrying value. $150,000 Instructions: (a) Compute the amount of goodwill recognized, if any, on July 31, 2012. Goodwill = Excess of the cost of the division over the fair value of the identifiable assets: $3,000,000 $2,750,000 = $250,000 (b) Determine the impairment loss, if any, to be recorded on December 31, 2012. No impairment loss is recorded, because the fair value of Conchita ($1,850,000) is greater than carrying value of the net assets ($1,650,000).

$1,600,000 (c) Assume that fair value of the Conchita Division is Determine the impairment loss, if any, to be recorded on December 31, 2012.

instead of

$1,850,000

Implied fair value of goodwill = Fair value of division less the carrying value of the division (adjusted for fair value changes), net of goodwill: Fair value of Conchita division $1,600,000 Carrying value of division 1,650,000 Increase in fair value of PP&E 150,000 Less: Goodwill (250,000) (1,550,000) Implied fair value of goodwill 50,000 Carrying value of goodwill (250,000) Impairment loss ($200,000) (d) Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. Loss on Impairment Goodwill 200,000 200,000

This loss will be reported in income as a separate line item before the subtotal income from continuing operations.

153010910.xlsx.ms_office, Problem 12-5 Solution, Page 11 of 12, 6/20/2013, 6:59 AM

Name: Date: Instructor: Course: Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse
P12-5 (Goodwill, Impairment) On July 31, 2012, Mexico Company paid $3,000,000 to acquire all of the common stock of Conchita Incorporated, which became a division of Mexico. Conchita reported the following balance sheet at the time of the acquisition. Current assets $800,000 Current liabilities $600,000 Noncurrent assets $2,700,000 Long-term liabilities $500,000 Total assets $3,500,000 Stockholders equity $2,400,000 Total liabilities and stockholders equity $3,500,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,750,000 Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2012, Conchita reports the following balance sheet information. Current assets $450,000 Noncurrent assets (including goodwill recognized in purchase) $2,400,000 Current liabilities ($700,000) Long-term liabilities ($500,000) Net assets $1,650,000 $1,850,000 The recorded It is determined that the fair value of the Conchita Division is amount for Conchitas net assets (excluding goodwill) is the same as fair value, except for property, plant, and equipment, which has a fair value above the carrying value. $150,000 Instructions: (a) Compute the amount of goodwill recognized, if any, on July 31, 2012. Text as appropriate. Amount

Amount

Formula

(b) Determine the impairment loss, if any, to be recorded on December 31, 2012. Enter text answer here.

$1,600,000 (c) Assume that fair value of the Conchita Division is Determine the impairment loss, if any, to be recorded on December 31, 2012. Enter text as appropriate. Text title Text title Text title Less: Account title Text title Text title Text title

instead of

$1,850,000

Amount Amount Amount Amount Formula Formula Amount Formula

(d) Prepare the journal entry to record the impairment loss, if any, and indicate where the loss would be reported in the income statement. Account title Account title Enter text answer here. Amount Amount

153010910.xlsx.ms_office, Problem 12-5, Page 12 of 12, 6/20/2013, 6:59 AM