Exercise 12-04Presented below is selected information for Carla Vista Company.Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter 0 for amounts.)1. Carla Vista purchased a patent from Vania Co. for $1,290,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Carla Vista determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balancesheet for the patent, net of accumulated amortization, at December 31, 2020?The amount to be reported2. Carla Vista bought a franchise from Alexander Co. on January 1, 2019, for $395,000. The carrying amount of the franchise on Alexander's books on January 1, 2019, was $395,000o. The franchise agreement had an estimated useful life of 30 years. Because Carla Vista must enter a competitive bidding at the end of 2021, it is unlikely that the franchise will be retained beyond2028. What amount should be amortized for the year ended December 31, 2020?The amount to be amortized3. On January 1, 2020, Carla Vista incurred organization costs of $297,500. What amount of organization expense should be reported in 2020?The amount to be reported4. Carla Vista purchased the license for distribution of a popular consumer product on January 1, 2020, for $159,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Carla Vista can renew the license indefinitely for successive 5-year terms. What amount should beamortized for the year ended December 31, 2020?The amount to be amortized

Any intangible assets purchased has to be amortized over the useful life of assets. If there is…

1. Carla Vista purchased a patent from Vania Co. for $1,290,000 on January 1, 2018. The patent is being amortized over its remaining legal ife of 10 years, expiring on January 1, 2028. During 2020, Carla Vista determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balane sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported

1. Carla Vista purchased a patent from Vania Co. for $1,290,000 on January 1, 2018. The patent is being amortized over its remaining legal ife of 10 years, expiring on January 1, 2028. During 2020, Carla Vista determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balane sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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