Exercise 11-21 (Algo) Change in estimate; useful life of patent [LO11-4, 11-5) Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the patent on a straight- line basis since 2020, when it was acquired at a cost of $13.5 million at the beginning of that year. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the beginning of 2024. Required: Prepare the year-end journal entry for patent amortization in 2024. No amortization was recorded during the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.5).

Exercise 11-21 (Algo) Change in estimate; useful life of patent [LO11-4, 11-5) Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the patent on a straight- line basis since 2020, when it was acquired at a cost of $13.5 million at the beginning of that year. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the beginning of 2024. Required: Prepare the year-end journal entry for patent amortization in 2024. No amortization was recorded during the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.5).

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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! Required information PA11-2 (Algo) Making Automation Decision [LO 11-1, 11-2, 11-3, 11-5] [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $6.97 million, and the equipment has a useful life of 5 years with a residual value of $1,020,000. The company will use straight- line depreciation. Beacon could expect a production increase of 39,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income Current (no automation) 86,000 units Proposed (automation) 125,000 units Per Unit $ 98 Total $ ? Per Unit $ 98 Total $ ? $ 15 12224 $ 15 25 ? 12 52 ? $ 46 ? 1,110,000 ? $ 51 ? 2,220,000 ? PA11-2 Part 4 Required: 4. Using a discount…
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Subject : Accounting
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