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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 Show Transcribed Text Account Titles and Explanation (To correct intangible asset account) Show Transcribed Text (To correct intangible asset account) (To record amortization expense) Debit Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 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.) Credit 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 Show Transcribed Text Account Titles and Explanation (To correct intangible asset account) Show Transcribed Text (To correct intangible asset account) (To record amortization expense) Debit Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 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.) Credit Credit 290,400 Balance 1,056,500 1,103,500 1,153,900 863,500 1,021,500 1,237,500 1,565,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 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 Show Transcribed Text Account Titles and Explanation (To correct intangible asset account) Show Transcribed Text ASSETS (To correct intangible asset account) (To record amortization expense) (To record amortization expense) Debit Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 Credit 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, eg. 5,125.) Credit 290,400 Balance 1,056,500 1,103,500 1,153,900 863,500 1,021,500 1,237,500 1,565,500
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 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 Show Transcribed Text Account Titles and Explanation (To correct intangible asset account) Show Transcribed Text ASSETS (To correct intangible asset account) (To record amortization expense) (To record amortization expense) Debit Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 Credit 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, eg. 5,125.) 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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