Answered: e of th

Business

Accounting

e of th

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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The following five independent questions relate to the GIANTS Co, whose reporting year ends on 12/31. Giants Co developed a trademark internally, incurring the following costs on 1/1/18: Design Registration $282,000 $132,000 $92,000 Research/Development On 1/1/20, Giants Co acquired a trade name for $498,000. At the time of development (1/1/18) and acquisition (1/1/20), Giants Co estimated that the economic life of each asset would be 12 years. On 1/1/24, Giants Co successfully defended the trade name in a legal battle at a cost of $21,700. As a result, the economic life was adjusted to extend through the year 2032. Also on this day, Giants Co has determined that the trademark would have an unlimited capacity to produce cash flows. ** REQUIRED: 1) Determine the following: a) TOTAL amount of amortization expense reported FYE 12/31/23. b) TOTAL amount of amortization expense reported FYE 12/31/24. c) carry value of the Trademark at 12/31/24. d) carry value of the Trade Name at 12/31/24.
On December 31, Chase Rock Company estimated that a goodwill of $80,000 was impaired. In addition, on June 1, Chase Rock acquired a patent with an estimated useful life of 10 years for $262,000. Required: Journalize the adjusting entry on December 31, for the impaired goodwill. Journalize the adjusting entry on December 31, for the amortization of the patent rights.
Carla Vista Company purchases a patent for $147,200 cash on January 2, 2021. Its legal life is 20 years and its estimated useful life is 8 years. Record the purchase of the patent on January 2, 2021.
Marigold Company purchases a patent for $504,000 on January 2, 2022. Its estimated useful life is 18 years. Prepare the journal entry to record amortization expense for the first year.
The intangible assets section of Novak Corporation's balance sheet at December 31, 2025, is presented here. Patents ($78,000 cost less $7,800 amortization) Copyrights ($46,800 cost less $32,760 amortization) Total $70,200 14,040 $84,240 The patent was acquired in January 2025 and has a useful life of 10 years. The copyright was acquired in January 2019 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2026. Jan. 2 Jan.-June Sept. 1 Oct. 1 Paid $60,840 legal costs to successfully defend the patent against infringement by another company. Developed a new product, incurring $299,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $26,400. Paid $52,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October. Acquired a copyright for…
Brea plc, which has a financial year end of 31 December, has an item of plant which meets the criteria to be classified as held for sale at 1 July 20X9. The original cost of the asset was $120,000 with an estimated useful life of 10 years and, at 1 January 20X9, had accumulated depreciation of $36,000. At 1 July 20X9 the fair value of the plant is $50,000 with costs to sell estimated at $4,000. a) Show how this asset would be accounted for in the 20X9 financial statements. b) Suppose that the plant is still held for sale at 31 December 20X9, and, at this date, the fair value and estimated costs to sell are respectively: (i) $45,000 and $4,000. (ii) $55,000 and $5,000 For(i) and (ii) show how the changes in fair value less costs to sell would be accounted for in the books of accounts
1. A patent was acquired from another company on January 1, 2019, for $25,000.The useful life is 10 years. 2. On April 2, 2019, the company was successful in obtaining a patent. The legal fees paid to an outside law firm were $8,400. The development costs paid to engineers who were employees of Bishop were $75,000. The useful life is 10 years. 3. On July 1, 2019, Bishop acquired all the assets net of the liabilities of Fargo Company. The identifiable net assets' market values at the time of purchase totaled $100,000. Bishop acknowledged the superior earnings and loyal customer following of Fargo Company. Therefore, Bishop and Fargo agreed on a total purchase price of $145,000. Any goodwill arising from the purchase is not to be amortized. 4. On December 31, 2019, Bishop paid a consulting firm $17,000 to develop a trademark. In addition, legal fees paid in connection with the trademark were $3,000. Assume a useful life of 20 years. 5. On August 1, 2019, Bishop acquired intangible asset…
Skysong Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A 3/1/21 17 years $41,616 $15,480 Patent B 7/1/22 10 years Patent C $16,320 9/1/23 4 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $234,000 were incurred during the year. 2. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows.
G Company purchases a patent for $120000 on Jan 1, 2008. It has estimated useful life is 10 years. Prepare journal entry to record patent expense for the first year
Rakko, Inc. acquired a patent on January 1 for $70,000 cash. The patent was estimated to have a useful life of 14 years with no residual value. Required: Part a. Prepare the journal entry to record the acquisition of the patent on January 1. Part b. Prepare the journal entry to record the annual amortization as of Dec 31.
Gemini Group has acquired a patent for $22.000. Its useful life is expected to be ten years. What amount would be recorded in a periodic amortization journal entry? Amortization Expense-Patents Patents 2,200 2,200 Amortization Expense-Patents 2,000 Patents 20,000 Amortization Expense-Patents 22,000 Patents 22,000 1,200 Amortization Expense-Patents 1,200 Patents Submit Answer
On January 1, Year 1, Zulu Co. sells and immediately leases back a building from X-RayInc. The building has a net book value of $30,000,000 ($80,000,000 cost – $50,000,000accumulated depreciation) and a fair value of $50,000,000. The selling price is equal tothe fair value. The remaining useful life is 13 years, the lease term is 10 years, and theestimated residual value of the building at the end of the lease term is $10,000,000. Thisvalue is not guaranteed. The stipulated fixed payment of $5,297,000 per year, first due onDecember 31, Year 1, represents market rents. The rate implied in the lease is 3.9%,which is the market interest rate for the risk level associated with the lease, and this rateis known by the seller-lessee.At the end of the lease term, X-Ray Inc., the buyer-lessor, has the option of requiringZulu to repurchase the building for $10,000,000.Required: Prepare all journal entries for Year 1 for the seller-lessee (Zulu Co.) and the buyer-lessor (X-ray Inc.) pertaining to…