In 2021, the company successfully defends the patent in extended litigation at a cost of $44,800, thereby extending the patent life to December 31, 2028. What is the proper way to account for this cost? Also, record patent amortization (full year) in 2021. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit

In 2021, the company successfully defends the patent in extended litigation at a cost of $44,800, thereby extending the patent life to December 31, 2028. What is the proper way to account for this cost? Also, record patent amortization (full year) in 2021. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit

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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On July 1, 2020, Ben entered a litigation case with Yona over unauthorized use of Yona’s latest technology. On September 1, 2020, Ben’s lawyers estimated that there is a 70% probability that Ben will lose in the next hearing that will be held on February 2, 2021. Ben stood to pay a maximum of $1,000,000 penalty by the court if proven guilty. Instructions: a. Why should Ben report this case on its Statement of financial position? b. How is the impact of this litigation Ben’s financial statement for 31 December 2020? c. If, October 15, 2020, the legal team finds new evidence for the claim against Ben, and revise the likelihood of Ben winning the case to 70%, how should this be shown in the financial statements?
Write double entry? On 7 November 2021 there was a fire in the warehouse, in which inventory valued at $12,000 was destroyed. Under the terms of the insurance contract, the insurance company has stated that it will only pay out the first $3,000 of the claim. No entries have yet been made to record this.
On November 1, 2017, Blessy company was awarded a judgement of 1,500,000 in connection with a lawsuit. The decision is being appealed by the defendant and it is expected that the appeal process will be completed by the end of 2018. The attorney believed that it is highly probable that an award will be upheld on appeal but the judgement may be reduced by 40%. What amount should be reported as a receivable on December 31, 2017?
Suits for damages totaling P8,000,000 are pending against Freddy. The company lawyers advised that losses on such suits are not probable. However, company policy has mandated authorization that provision be made in the accounts for any possible loss up to P5,000,000. The suit was settled in 2021 and payment of P7,000,000 was made. Required: Prepare the entry to record the contingent liability
Marks Company sold goods to Birch Company totaling $51,830 during 2020. When Birch was unable to meet Marks’normal terms, Marks accepted from Birch a $60,000, 3-year non-interest-bearing note due 1/1/24. (Marks has acceptednotes in the past in settlement of open accounts.)Required:(a) Prepare Marks’ journal entry on 1/1/21 when the note was signed.(b) Prepare a table which shows the amortization of bond discount over the life of the note.(c) What is the 12/31/22 adjusting entry that will be recorded by Marks?(d) What is the purpose of the journal entry at 12/31/22?
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Express Co. purchased equipment on March 1, 2019, for $95.000 on account. The equipment had an estimated useful life of five years with a residual value of $5.000. The equipment is disposed of on February 1. 2022. Express Co. uses the diminishing balance method of depreciation with a 20% rate and calculates depreciation for partial periods to the nearest month The company has an August 31 year end Your answer is correct. Record the acquisition of the equipment on March 1, 2019. (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 amountsJ Debit Credit Date Account Titles and Explanation 95000 Mar 1 faiement 500 Accounts Favable Torrserd purchase of equipment on account)
Bridgeport Machinery Co. manufactures equipment to a very high standard of quality; however, it must still provide a warranty for each unit sold, and there are instances where the machines do require repair after they have been put into use. Bridgeport started in business in 2023, and as the controller, you are trying to determine whether to use the assurance-type or service-type warranty approach to measure the warranty obligation. You would like to show the company president how this choice would affect the financial statements for 2023, and advise him of the better choice, keeping in mind that the service-type approach is consistent with IFRS, and that there are plans to take Bridgeport public in a few years. You have determined that sales on account for the year were 1,040 units, with a selling price of $2,700 each. Ignore any cost of goods sold. The warranty is for two years, and the estimated warranty cost averages $180 per machine. Actual costs of servicing warranties for the…
Garrett Corporation began operations in 2021. To maintain its accounting records, Garrett entered into a two-year agreement with Accurite Company. The agreement specifies that Garrett will pay $85,000 to Accurite immediately, and in return, Accurite will make its accounting software accessible via the Internet to Garrett and maintain all infrastructure necessary to run the software and store records. At any time, Garrett Corporation can freely remove its records and run the software on its own hardware or that of another accounting services company. In addition to the cost of the agreement, Garrett incurred $15,000 early in the year devising a plan for its accounting software needs, $25,000 for customizing its own computers for integration with Accurite’s software, and $20,000 after the software was implemented to train its employees. Determine the initial amount that Garrett should capitalize related to the software development costs.
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