A company buys an oil rig for $2,400,000 on January 1, 2018. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $609,000 (present value at 12% is $196,080). 12% is an appropriate interest rate for this company. What expense should be recorded for 2018 as a result of these events?
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- For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.A company buys an oil rig for $2,700,000 on January 1, 2020. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $575,000 (present value discounted at 10% (fair rate for this company) is $221,687). What is the total amount of expense that shoOuld be recorded in the financial statements for 2020 as a result of these events (hint: consider both depreciation of the oil rig and any interest on the asset retirement obligation). There is no estimated salvage value for the oil rig and the company uses straight-line depreciation. Round all intermediate calculations to whole dollars. O $346,266 O $314,338 O $292.169 O $22,169 O $327,500
- A company buys an oil rig for $1,500,000 on January 1, 2014. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $400,000 (present value at 10% is $154,220). 10% is an appropriate interest rate for this company. What expense should be recorded for 2014 as a result of these events? Depreciation expense of $190,000 Depreciation expense of $165,422 and interest expense of $15,422 Depreciation expense of $150,000 and interest expense of $40,000 Depreciation expense of $215,422 and interest expense of $15,422??1.
- I want accurate answerOn March 1, 2020, Tebow Company purchased a patent for $158,000 cash. Although the patent gives legal protection for 19 years, the patent will be used for only 2 years. Assume straight-line amortization. Amortization per unit (Cost Res. Value)/Time = Amortization per year Amortization per year X portion of year = Amortization Journalize a) the purchase of the patent, and b) the amortization expense of the patent as of December 31, 2020. Date a b Check All Parts Description Debit CreditA corporation bought a machine for RP 8,000 with a commercial useful life of 4 years and a fiscal useful life of 3 years, but no salvage value, in early 2019. In both commercial and fiscal terms, machines are assembled utilizing the straight-line method. In addition, the company will receive Rp. 6,000 in 2019, with the warranty charge anticipated to be 10% of revenue. The warranty cost is due in fiscal year 2022. The general rate of taxation is 30%. Required: Calculate and explain the deferred tax asset or obligation for the two transactions at the end of 2019!
- Crane Manufacturing Company acquired a patent on a manufacturing process on January 1, 2020 for $5550000. It was expected to have a 10 year life and no residual value. Crane uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $510000 per year for the next eight years. The present value of these cash flows, discounted at Crane's market interest rate, is $2675000. At what amount should the patent be carried on the December 31, 2021 balance sheet? $4080000. $5550000. $4440000. $2675000.On October 1, 2022, Abbott Inc. purchased equipment costing $700,000 by paying $150,000 cash and signing a $550,000, 10%, 1-year note for the remainder. The face value of the note plus interest is due when the note matures in one year. The equipment will be used in a variety of R&D activities. It is expected to have a useful life of 5-years and a residual value of $20,000. Abbott uses the DDB method for the equipment. Required: In the journal below, record the equipment purchase on October 1, and record depreciation and accrued interest for 2022. Round all calculations to the nearest whole month and whole dollar.Fairwinds Hotels purchase a new building lot on April 18th 2018 for $450k and plans to built an hotel for $32million. The furniture (7 year asset) is estimated to cost $25 million. Develop the depreciation table for this property for the fisrt 8 years of its service (i.e., 2018-2026). What is the tax liability if the hotel is sold in May 28% tac bracket and pay 15% capital gains taxes. 3rd 2026 for $28million? The company is in a