As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 75,000 1,015,000 Jan. 31 Payment of 7 months' rent on property leased by Bryan 91,000 1,106,000 Feb. 11 Premium on common stock 250,000 856,000 March 31 Unamortized bond discount on bonds due March 31, 2040 84,000 940,000 April 30 Promotional expenses related to start-up of business 207,000 1,147,000 June 30 Operating losses for first 6 months 241,000 1,388,000 Instructions Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years.
As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below. Intangible Assets Debit Credit Balance Jan. 4 Research and development costs 940,000 940,000 Jan. 5 Legal costs to obtain patent 75,000 1,015,000 Jan. 31 Payment of 7 months' rent on property leased by Bryan 91,000 1,106,000 Feb. 11 Premium on common stock 250,000 856,000 March 31 Unamortized bond discount on bonds due March 31, 2040 84,000 940,000 April 30 Promotional expenses related to start-up of business 207,000 1,147,000 June 30 Operating losses for first 6 months 241,000 1,388,000 Instructions Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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As the recently appointed auditor for Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2020, are prepared. The controller for Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below.
| Intangible Assets | ||||
| Debit | Credit | Balance | ||
| Jan. 4 | Research and development costs |
940,000
|
940,000
|
|
| Jan. 5 | Legal costs to obtain patent |
75,000
|
1,015,000
|
|
| Jan. 31 | Payment of 7 months' rent on property leased by Bryan |
91,000
|
1,106,000
|
|
| Feb. 11 | Premium on common stock |
250,000
|
856,000
|
|
| March 31 | Unamortized bond discount on bonds due March 31, 2040 |
84,000
|
940,000
|
|
| April 30 | Promotional expenses related to start-up of business |
207,000
|
1,147,000
|
|
| June 30 | Operating losses for first 6 months |
241,000
|
1,388,000
|
Instructions
Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years.
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