A patent was purchased for $670,000 with a legal life of 20 years. Management estimates that the patent has an 8-year economic life. The amortization would include a(n): A. increase in amortization expense for $33,500 B. increase in research and development expense for $670,000 C. decrease in Patent for $83,750 D. increase in Accumulated Amortization for $670,000
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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.
- For each of the following unrelated situations, calculate the annual amortization expense: a. A patent with a 15-year remaining legal life was purchased for $270,000. The patent will be commercially exploitable for another nine years. b. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $42,300 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 18 years and is currently worth $378,000. c. A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for four years was obtained at a cost of $63,000. Satisfactory sales performance over the four years permits renewal of the franchise for another four years (at an additional cost determined at renewal) Annual expense a $ b $ C $Amortization Expense For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A patent with a 15-year remaining legal life was purchased for $288,000. The patent will be commercially exploitable for another nine years. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $45,000 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 18 years and is currently worth $378,000. A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for four years was obtained at a cost of $68,000. Satisfactory sales performance over the four years permits renewal of the franchise for another four years (at an additional cost determined at renewal). General Journal Ref. Description Debit Credit a. Answer Answer…Amortization Expense For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A patent with a 15-year remaining legal life was purchased for $756,000. The patent will be commercially exploitable for another six years. A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $88,200 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 15 years and is currently worth $720,000. A franchise granting exclusive distribution rights for a new wind turbine within a three-state area for four years was obtained at a cost of $72,000. Satisfactory sales performance over the four years permits renewal of the franchise for another four years (at an additional cost determined at renewal). General Journal Ref. Description Debit Credit a. Answer Answer Answer…
- 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. JOURNAL Page Date Description PR DR CRGemini Group has acquired a patent for $22.000. Its useful life is expected to be ten years. What amount would be recorded in a periodic amortization journal entry? Amortization Expense-Patents Patents 2,200 2,200 Amortization Expense-Patents 2,000 Patents 20,000 Amortization Expense-Patents 22,000 Patents 22,000 1,200 Amortization Expense-Patents 1,200 Patents Submit AnswerDuring 2022, Brownie Company incurred research and development cost of P272,000 relating to the patent that was granted on July 1, 2022. Cost of registering the patent is P68,000. The patent legal life is 20 years. However, the management expected that the patent will be useful for 10 years only. On December 31, 2022, what amount should be reported as patent, net of accumulated amortization?
- A company pays a patent for $ 98,000 with a useful life of 12 years.Calculate amortization. You must present the calculation made.An investment of $800,000 is made in equipment that qualifies as 3-year equipment for MACRS-GDS depreciation. The BTCF profile for the investment is given below, including a $200,000 salvage value at the end of the 5-year planning horizon. A 25% tax rate applies and the after-tax MARR is 8%. Determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR.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.
