Amortization and depletion entriesData related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows:a. On December 31, the company determined that $930,000 of goodwill was impaired.b. Governmental and legal costs of $6,720,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 15 years. Amortization is to be for one-fourth of a year.c. Timber rights on a tract of land were purchased for $800,000 on February 4. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,400,000 board feet of timberwere cut and sold.Required:1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation.Impairment, Amortization or Depletion ExpenseItema.b.C.2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item. If an amount box does not require an entry, leave it blank.a.b.C.

1a) The impairment of Goodwill for the current year as given in the problem is $930,0001b)…

Answered: Amortization and depletion entries Data…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Depreciation by three methods; partial years Perdue Company purchased equipment on April 1 for $66,690. The equipment was expected to have a useful life of 3 years, or 5,400 operating hours, and a residual value of $1,890. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the final multiplier to four decimal places. Then, round the answer for each year to the nearest whole dollar.
Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: A. Timber rights on a tract of land were purchased for $1,600,000 on February 22. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,100,000 board feet of timber were cut and sold. B. On December 31, the company determined that $3,750,000 of goodwill was impaired. C. Governmental and legal costs of $6,600,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. 2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS General Ledger…
Equipment acquired at a cost of $104,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed in service on October 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Year 1 Year 2 Year 1 Depreciation Year 2 $ b. Determine the depreciation for the current fiscal year and for the following fiscal year by the double-declining-balance method. $ Depreciation $ $
Depletion, patent amortization, goodwill impairment Data related to the acquisition of timber rights and intangible assets of Gemini Company during the current year ended December 31 are as follows: On December 31, Gemini Company determined that $3,000,000 of goodwill was impaired. Governmental and legal costs of $920,000 were incurred by Gemini Company on June 30 in obtaining a patent with an estimated economic life of eight years. Amortization is to be for one-half year. Timber rights on a tract of land were purchased for $1,350,000 on March 6. The stand of timber is estimated at 15,000,000 board feet. During the current year, 3,300,000 board feet of timber were cut and sold. Indicate the effects on the liquidity metric free cash flow and profitability metric asset turnover for each of the following: LiquidityFree Cash Flow ProfitabilityAsset Turnover 1. Impaired goodwill (Higher, lower or no effect) (Higher, lower or no effect) 2. Patent amortization (Higher, lower or no…
Amortization and Depletion Entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $1,300,000 of goodwill was impaired. b. Governmental and legal costs of $7,360,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 10 years. Amortization is to be for one-fourth of a year. c. Timber rights on a tract of land were purchased for $1,380,000 on February 4. The stand of timber is estimated at 6,000,000 board feet. During the current year, 1,600,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item Impairment, Amortization or Depletion Expense а. b. С.
Partial-Year Depreciation Equipment acquired at a cost of $65,000 has an estimated residual value of $4,000 and an estimated useful life of 10 years. It was placed in service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 $fill in the blank 1 Year 2 $fill in the blank 2 b. Determine the depreciation for the current fiscal year and the following fiscal year by the double-declining-balance method. Depreciation Year 1 $fill in the blank 3 Year 2 $fill in the blank 4
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $61,290. The equipment was expected to have a useful life of three years, or 5,400 operating hours, and a residual value of $1,890. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method.
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $48,870, The equipment was expected to have a useful life of three years, or 4,320 operating hours, and a residual value of $1,350. The equipment was used for 800 hours during Year 1, 1,500 hours in Year 2, 1,300 hours in Year 3, and 720 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 Year 2 Year 3 Year 4 b. Units-of-activity method Year Amount Year 1 Year 2 Year 3 Year 4 c. Double-declining-balance method Year Amount
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of $656,250 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $56,400. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On March 4 of Year 5, the equipment was sold for $96,100. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Year DepreciationExpense Accumulated Depreciation,End of Year Book Value,End of Year 1 $fill in the blank 6c5ae1f44078fe7_1 $fill in the blank 6c5ae1f44078fe7_2 $fill in the blank 6c5ae1f44078fe7_3 2 $fill in the blank 6c5ae1f44078fe7_4 $fill in the blank 6c5ae1f44078fe7_5 $fill in the…
Disposal of fixed asset Equipment acquired on January 6 at a cost of $386,400 has an estimated useful life of 10 years and an estimated residual value of $50,400. a. What was the annual amount of depreciation for Years 1-3 using the straight-line method of depreciation? Year Depreciation Expense Year 1 Year 2 Year 3 b. What was the book value of the equipment on January 1 of Year 4? c. Assuming that the equipment was sold on January 3 of Year 4 for $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3 d. Assuming that the equipment had been sold on January 3 of Year 4 for $291,300 instead of $271,300, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. January 3
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Computing Impairment of Intangible Assets Stiller Company had the following information for its three intangible assets. 1. Patent: A patent was purchased for $140,000 on June 30 of Year 1; Stiller estimated the useful life of the patent to be 15 years. On December 31 of Year 3, the estimated future cash flows attributed to the pat were $119,000. The fair value of the patent was $105,000. 2. Trademark: A trademark was purchased for $7,000 on August 31 of Year 2. The trademark is considered to have an indefinite life. The fair value of the trademark on December 31 of Year 3 is $3,500. 3. Goodwill: Stiller recorded goodwill in January of Year 2, related to a purchase of another company. The carrying value of goodwill is $42,000 on December 31 of Year 3. On December 31 of Year 3, the segment for which the goodwill relates had a fair value of $812,000. The book value of the net assets of the segment (including goodwill) is $840,000. a. Classify each of the intangible assets above as a…

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