2. Tartabull bought a franchise from Alexander Co. on January 1, 2019, for $900,000. The carrying amount of the franchise onAlexander's books on January 1, 2019, was $600,000. The franchise agreement had an estimated useful life of 20 years. BecauseTartabull must enter a competitive bidding at the end of 2028, it is unlikely that the franchise will be retained beyond 2028. Whatamount should be amortized for the year ended December 31, 2020?The amount to be amortizedSA$701250

The first step is to identify the purchase price of the franchise and the carrying amount on the…

Answered: 2. Tartabull bought a franchise from…

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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Ayayai Corporation purchases a patent from Blossom Company on January 1, 2025, for $63,000. The patent has a remaining legal life of 14 years. Ayayai estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Ayayai's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation (To record purchase of patents) (To record amortization of patents) Debit Credit
Zara corporation decided to exchange its old machine that costs $100,000 with a new one. On January 1, 2020, the company exchanged the old machine for a new one paying $15,000 cash and giving the old machine. On the date of exchange the old machine had an accumulated depreciation of $60,000 and fair value of $80,000. As a result of the exchange the company recognized: * O Gain $40,000 Gain $20,000 O Loss $45,000 O Loss $65,000 No gain or Lss Back Next Page 11 of 12
On January 1, 2021, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2024, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $430,152 and has an expected economic life of five years. Aqua and Maywood expect the residual value at December 31, 2024, to be $66,000. Negotiations led to Maywood guaranteeing a $94,000 residual value. Equal payments under the lease are $132,000 and are due on December 31 of each year with the first payment being made on December 31, 2021. Maywood is aware that Aqua used a 7% interest rate when calculating lease payments. (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. & 2. Prepare the appropriate entries for Maywood on January 1, 2021 and December 31, 2021, related to the lease. (If no entry is required for a transaction/event, select "No journal entry required" in the…
Christina Co. has a factory equipment with a carrying amount of P700,000 and has a remaining useful life of 7 years. On January 1, 2020, Christina agreed to an exchange transaction with Kat & Inc. to transfer the equipment to the latter. The transfer satisfied the requirements of PFRS 15 to be a sale and Christina immediately leased it back for a lease term equal to the remaining life of the equipment. The sales price amounted to P500,000 while annual rental payable at the end of each year is P100,000 for an implicit rate of 10%. Selling price is equal to fair value. How much loss shall Christina recognize in relation to the sale and leaseback transaction? a. 681,578.63 b. 200,000 c. 194,736.75 d. 5,263.25
In January 2021, Blossom Corporation purchased a patent for a new consumer product for $558900. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. In 2026 the product was determined to be obsolete due to a competitor's new product. What amount should Blossom report on the income statement during 2026 related to the patent, assuming straight-line amortization is recorded at the company's December 31 year-end? $35890 O $279450 O $578900 O $179450
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Kingbird Corporation purchased a special tractor on December 31, 2020. The purchase agreement stipulated that Kingbird should pay $21,960 at the time of purchase and $5,430 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2020, at what amount, assuming an appropriate interest rate of 12%? I got -612501.1859 but it is incorrect
Culver Products Ltd. purchased a patent on January 1, 2020, for $840,000. At the time of the purchase, the patent had a remaining legal life of 15 years. In January, 2023, Culver spent $372,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. Culver's year-end was December 31. Prepare the entries on the books of Culver Ltd. to record (a) the purchase of the patent, (b) amortization for the first year (2020), (c) the defense of the patent, and (d) amortization for 2023. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.) No. Account Titles and Explanation (a) (b) (c) (d) Debit Credit
Remington Corporation purchases a patent from Durler Company on January 1, 2020, for $84,000. The patent has a remaining legal of 16 years. Remington feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Remington's books is $67,200. In January, Remington spends $20,000 successfully defending a patent suit. Remington still feels the patent will be useful until the end of 2029. Prepare Remington's journal entries to record the amortization for 2020 and 2022.
Garnet Corporation enters into a 4-year construction contract worth $100 million with Gold company on January 1, 2022. At the end of 2022, construction costs totaled $20 million and Garnet estimates $60 million of construction costs remain. If Garnet uses the percent of completion method to determine revenues, how much revenue will Garnet recognize in 2022 related to the construction contract?
Presented below is selected information for Sandhill Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) (a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in 2017? Amount to be reported $ (b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on Carla Vista's books on January 1, 2016, was $238,00O. The franchise agreement had an estimated useful life of 10 years. Because Sandhill must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017? Amount to be amortized $ %24
On January 1, 2024, Nguyen Electronics leased equipment from Nevels Leasing for a four-year period ending December 31, 2027, at which time possession of the leased asset will revert back to Nevels. The equipment cost Nevels $779,677 and has an expected economic life of five years. Nevels expects the residual value on December 31, 2027, will be $103,000. Negotiations led to the lessee guaranteeing a $146,000 residual value. Equal payments under the lease are $203,000 and are due on December 31 of each year with the first payment being made on December 31, 2024. Nguyen is aware that Nevels used a 8% interest rate when calculating lease payments. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare the appropriate entries for both Nguyen and Nevels on January 1, 2024, to record the lease. Prepare all appropriate entries for both Nguyen and Nevels on December 31, 2024, related to the lease.

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