Dazzle Corporation purchased a patent for P7,140,000 on January 2014. The patent is being amortized over the remaining legal life of 15 years expiring on January 2029. During 2017, Dazzle Corporation determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. Using the same information on number (33), what amount should be charged to patent amortization expenses for the year ended December 31, 2017, assuming there is no change in the patent's useful life? OP816,000 O P476,000 O None of the above OP571.200 OP4,896,000

Dazzle Corporation purchased a patent for P7,140,000 on January 2014. The patent is being amortized over the remaining legal life of 15 years expiring on January 2029. During 2017, Dazzle Corporation determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. Using the same information on number (33), what amount should be charged to patent amortization expenses for the year ended December 31, 2017, assuming there is no change in the patent's useful life? OP816,000 O P476,000 O None of the above OP571.200 OP4,896,000

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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Corporation was granted a patent on a product on January 1, 2004. To protect its patent. the corporation purchased on January 1, 2015 a patent on a competing product which was originally issued on January 10, 2011. The cost of the competing patent should be: a. amortized over a maximum period of 20 years. b. amortized over a maximum period of 16 years. c. amortized over a maximum period of 9 years. d. expensed in 2015 Explain each choices. Why is it not the answer or why it is the answer.
On December 31. 2021. Rhone-Metro Industries leased equipment to Western Soya Co. for a four-year period ending December 31, 2025, at which time possession of the leased asset will revert back to Rhone-Metro. The equipment cost Rhone-Metro $365,760 and has an expected useful life of six years. Its normal sales, price is $365,760. The lessee-guaranteed residual value at December 31, 2025, is $25,000. Equal payments  under the lease are $ 100,000 and are due on December 31 of each year. The first payment was made on December 31, 2021. Western Soya's incremental borrowing rate is 12%. Western Soya knows the interest rate implicit in the lease payments is 10%. Both companies use straight-line depreciation or amortization. Required: Prepare the appropriate entries for both Western Soya and Rhone-Metro on December 31, 2025, assuming the equipment is returned to Rhone-Metro and the actual residual value on that date is $1,500.
The Western Company, a company that follows IFRS, provided you with the following information about a number of transactions that took place in 2020: 1) On January 1, 2020 Western acquired a patent for $45,000 cash. The patent expires on January 1, 2028, but the company determined that it will generate future benefits for 6 years from the date of acquisition. During 2022, the total useful life of the patent was revised to 4 years. 2) During March 2020, The Wester Company invested $120,000 in research costs about a new product that it aims to develop in 2021. The amount was paid in cash. 3) The Western Company estimates that its internal goodwill is worth $980,000 in July 2020. Required- a) Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022. b) Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.
Reported in the ledger of Mama Company On December 31, 2017, is a Patent account with a balance of P120,000, and accumulated amortization of P 60,000. The Patent is being amortized for its useful life of eight years. On January 1, 2018, Mayumi purchased a competing patent for a total cost of P75,000. The newly purchased patent is expected to be used for five years. On July 1, 2018, Mama spent P 50,000 to defend its new patent against an infringement suit. What is the carrying value of the patents on December 31, 2018?
In January 2021, Blossom Corporation purchased a patent for a new consumer product for $558900. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. In 2026 the product was determined to be obsolete due to a competitor's new product. What amount should Blossom report on the income statement during 2026 related to the patent, assuming straight-line amortization is recorded at the company's December 31 year-end? $35890 O $279450 O $578900 O $179450
How much is the amortization expense for the 2020 income statement assuming the defense was unsuccessful?
Wilkins Food Products Inc. acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2014. In payment for the machine Wilkins issued a threeyear installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 10%. Lawrence made a conceptual error in preparing the amortization schedule which Wilkins failed to discover until 2016. As a result of the error, Wilkins understated interest expense by $45,000 in 2014 and $40,000 in 2015. Required: 1. Determine which accounts are incorrect as a result of these errors at January 1, 2016, before any adjustments. Explain your answer. (Ignore income taxes.) 2. Prepare a journal entry to correct the error. 3. What other step(s) would be taken in connection with the error?
On January 1, 2022, Proton, Inc. purchased a patent giving it exclusive rights to manufacture a new type of synthetic clothing for P240,000. While the patent had a remaining legal life of 15 years at the time of purchase, Proton expects the useful life to be only eight more years. In addition, Proton purchased equipment related to production of the new clothing for P140,000. The equipment has a physical life of 10 years but Proton plans to use the equipment only over the patent's service life and then sell it for an estimated P20,000. Proton uses straight-line for all long-term assets. The amount charged to expense in 2022 related to the patent and equipment should be: O P40,000. P31,000. O P38,000. O P45,000.
FIFA Footballs acquired a patent in 2021 at a cost of $150 million and amortizes the patent on a straight-line basis. During 2024 management decided that the benefits from the patent would be received over a total period of 8 years rather than the 20-year legal life being used to amortize the cost. FIFA's 2024 financial statements should include: Multiple Choice a patent balance of $150 million. a patent balance of $102 million. patent amortization expense of $15 million. patent amortization expense of $7.5 million.
On April 1, 2020, the Tech Corp. acquired a patent for $162,000. This patent has an estimated useful life of 12 years with an estimated residual value of $18,000. Required: a. In determining the 12-year useful life of this patent, what two lives of the patent did Tech consider? b. Which of these two lives did Tech use as the patent's useful life or is that determinable? c. Make the December 31, 2020, entry for Tech to record the 2020 amortization of this patent in the manner that Tech would have to use in this class. d. What will be the book value of this patent on the December 31, 2023, balance sheet? 14 010 120m 20 1
Cayman Corp. incurred $ 140,000 of basic research and $ 35,000 of development costs to develop a product for which a patent was granted on January 2, 2015. Legal fees and other costs associated with registration of the patent totalled $ 50,000. On March 31, 2020, Cayman paid $ 75,000 for legal fees in a successful defence of the patent. The total amount capitalized for the patent through March 31, 2020 should be $ 265,000. $ 160,000.