Please give me answer general accounting A patent was purchased for $670,000 with a legal life of 20years. Management estimates that the patent has an 8-yeareconomic life. The amortization would include a(n):A. increase in amortization expense for $33,500B. increase in research and development expense for$670,000C. decrease in Patent for $83,750D. increase in Accumulated Amortization for $670,000

Step 1: Define Intangible AssetsIntangible assets include the fixed assets that lack physical…

Answered: A patent was purchased for $670,000…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 10PB: For each of the following unrelated situations, calculate the annual amortization expense and...

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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.
Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.
On 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 Credit
An asset with a purchase price of $501,013 falls in the 3-year MACRS asset class. The asset will be sold at the end of a three year project for $180,745. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 33% 2 45 3 15 4 7
At the beginning of the year, a company purchases a patent for $1504000. The remaining legal life of the patent is 10 years, but management estimates that the patent will generate additional revenue for the next 16 years because there are currently no known competitors. What amount of amortization on the patent will be recorded for the asset at the end of the first year, assuming that the straight-line method is used and that the asset was purchased at the beginning of the year? O $-0- $150400 $94000 $188000
LION Tech leases equipment on January 1, Year One, for 8 years, while the equipment has a total useful life of 8 years. Ownership of the equipment will transfer to the lessee at the end of the lease term. Lease payments are $12,000 per year, with the first payment made immediately. The present value of these payments at the lessee's incremental borrowing rate of 8 percent is $65,000. What amount of depreciation expense should LION Tech recognize for Year One? a. $0 b. $8,125 c. $10,833 d. $12,000
4) An asset was purchased for P100,000 and would retire at the end of 15 years with a salvage value of P4,000. With an annual operating cost of P18,000, determine the capitalized cost of the asset based on an interest rate of 8% cpd. a.
Summit Corp. purchased a patent on January 1, 2022, for $500,000. The company expects to derive economic benefits from the patent for 10 years, although its legal life is 20 years. Additionally, during 2022, Summit incurred $200,000 in research and development costs. What is the carrying amount of the patent as of December 31, 2022? a) $450,000 b) $475,000 c) $490,000 d) $300,000
Berry Co. purchases a patent on January 1, 2021, for $38,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the amortization expense for the year ended December 31, 2022? Multiple Choice $15,200. $0. $7,600. $38,000.
Questions #28-29 are based on the information below: On January 1, 2021, The Donut Stop purchased a patent for $80,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only five more years. 28. The entry to record the 2021 amortization expense for the patent should include: A. Debit Patents for $16,000 B. Debit Amortization Expense for $16,000 C. Debit Amortization Expense for $4,000 D. Debit Patents for $4,000 29. What should be recorded on the balance sheet for Patents at December 31, 2022? A. $80,000 B. $64,000 C. $72,000 D. $48,000
An asset was acquired by Dave company with the following values: First cost= $100000, depreciable life=3 years, and an estimated salvage value of $20000. Initial investment is borrowed at 10% per year with repayment of an equal uniform amounts at the end of each year in 3 years. Expected gross income and expenses are $50000 and $10000 at year 1, respectively, and both increase by $2500 per year subsequently. The asset is actually salvaged after 3 years for $125000. A)What will be the size of each payment for the $100000 debt? How much of each payment interests and how much of each payment is principal (i.e., towards the $100000 debt)? b) Calculate depreciation using double-declining balance method (i.e., d=2/N) c) Fill in all the blank cells in the below table. Show all the calculations for all gray cells to receive full credit. Te=40% d) Assuming a MARR of 10%, determine if it is a good investment on an after-tax basis no excel plezz

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