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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Quiz Company acquired a patent on July 1, Year 1. On the date of acquisition, the patent had a remaining legal life of 12 years and a fair value of $120,000. Quiz Company made a cash payment of $20,000 and signed a 5-year, 6%, $80,000 note to acquire the patent. The note required five equal annual payments. Quiz Company believes that the product under patent was marketable for another 10 years from the date of acquisition. Determine the carrying value of the patent at December 31, Year 2.
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 Jan 1, 20X1, ABC Corp purchased a patent for P90,000. At the time of purchase the patent was valid for 15 years, however the patent's useful life was estimated to be only ten years due to the competitive nature of the product. How much is the amortization of patent at Dec 31, 20X1?
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On January 1, 2021, EFG Company acquired a building for P1,200,000. Professional fees for legal services and property transfer taxes incurred on the acquisition amounted to P50,000. Start-up costs incurred amounted to P20,000. Operating losses incurred before the planned level of occupancy of the building is achieved amounted to P120,000. Materials labor and overhead incurred for repairs and renovation of the property before it was put to leasable condition amounted to P200,000. Abnormal amounts of wasted material, labor and other resources incurred in developing the property amounted to P60,000. The renovation and repairs were completed on March 31, 2021. The building has an estimated remaining useful life of 10 years with no residual value. EFG Company uses cost model and the straight-line method of depreciation for its investment property. The building has a fair value of P1,400,000 on December 31 ,2021 Required: How much is amount of investment property recognized on…
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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…
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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.