As the recently appointed auditor for Sheridan Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sheridan mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sheridan (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 Account Titles and Explanation Debit 1,055,100 46,000 49,700 Debit 157,000 213,000 330,000 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 Sheridan 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 O decimal places, e.g. 5,125.) Credit Credit 314,700
As the recently appointed auditor for Sheridan Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sheridan mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sheridan (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 Account Titles and Explanation Debit 1,055,100 46,000 49,700 Debit 157,000 213,000 330,000 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 Sheridan 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 O decimal places, e.g. 5,125.) Credit Credit 314,700
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:As the recently appointed auditor for Sheridan Corporation, you have been asked to examine selected accounts before the six-month
financial statements of June 30, 2023, are prepared. The controller for Sheridan mentions that only one account is kept for intangible
assets. The entries in Intangible Assets since January 1, 2023, are as follows:
INTANGIBLE ASSETS
Jan. 4
5
Feb. 11
Apr. 30
June 1
30
Research costs
Legal costs to obtain patent
Payment of seven months' rent on property leased by Sheridan (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
Account Titles and Explanation
Debit
Debit
1,055,100
46,000
49,700
157,000
213,000
330,000
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 Sheridan 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 O decimal places, e.g. 5,125.)
Credit
Credit
314,700
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