As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland 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 Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland 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)
As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland 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 Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland 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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
H5.
Transcribed Image Text:Amortization Expense
Accumulated Amortization - Development Costs
(To record amortization expense)
1
Transcribed Image Text:As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month
financial statements of June 30, 2023, are prepared. The controller for Sunland 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.
June 1
30
30
Research costs
Legal costs to obtain patent
Payment of seven months' rent on property leased by Sunland (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
1,057,100
45,000
49,700
160,000
222,000
311,000
Credit
301,100
Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful
life of 10 years and that Sunland 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.)
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