As the recently appointed auditor for Blossom Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Blossom mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS L ) ) Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Blossom (February to August) Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criteria) Start-up costs for first six months of operations Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 Credit 290,400 Balance 1,056,500 1,103,500 1,153,900 863,500 1,021,500 1,237,500 1,565,500
As the recently appointed auditor for Blossom Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Blossom mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS L ) ) Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Blossom (February to August) Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criteria) Start-up costs for first six months of operations Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 Credit 290,400 Balance 1,056,500 1,103,500 1,153,900 863,500 1,021,500 1,237,500 1,565,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text:Prepare the journal entry or entries needed to correct this account. Allocate rent between the prepaid and expense accounts at Jun
30. Assume that the patent and the development costs have a useful life of 10 years and that Blossom follows IFRS. (Credit account titles
are automatically indented when the 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. Round answers to 0 decimal places, e.g. 5,125.)
Account Titles and Explanation
(To correct intangible asset account)
Show Transcribed Text
(To correct intangible asset account)
(To record amortization expense)
(To record amortization expense)
Debit
C
Credit
II
Transcribed Image Text:As the recently appointed auditor for Blossom Corporation, you have been asked to examine selected accounts before the six-month
financial statements of June 30, 2023, are prepared. The controller for Blossom mentions that only one account is kept for intangible
assets. The entries in Intangible Assets since January 1, 2023, are as follows:
INTANGIBLE ASSETS
L
)
)
Research costs
Legal costs to obtain patent
Payment of seven months' rent on property leased by Blossom (February to August)
Proceeds from issue of common shares
Promotional expenses related to start-up of business
Development stage costs (meet all six development stage criteria)
Start-up costs for first six months of operations
Debit
1,056,500
47,000
50,400
158,000
216,000
328,000
Credit
290,400
Balance
1,056,500
1,103,500
1,153,900
863,500
1,021,500
1,237,500
1,565,500
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