Intangible Long-Term Assets Track Town Co. had the following transactions involving intangible assets: Jan. 1 Purchased a patent for leather soles for $13,560 and estimated its useful life to be 12 years. Apr. 1 Purchased a copyright for a design for $10,400 with a life left on the copyright of 20 years. The estimated remaining (economic) life of the copyright is five years. July 1 Signed a 6-year franchise agreement and opened a Starting Line high-tech running shoe store. Paid $65,400 to the franchisor. Required: 1. Using the straight-line method, calculate the amortization of the patent, copyright, and Franchise. a. Patent b. Copyright $ c. Franchise $ 2. Prepare general journal entries to record the end-of-year amortizations. Page: 1 DOC. POST. NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT 20-- 1 Dec. 31 Patent Amortization (Expense) Patents 2 3 3 4 Dec. 31 Copyright Amortization (Expense) 4 Copyrights 6 7 Dec. 31 Franchise Amortization (Expense) 7 8 Franchise 8

Intangible Long-Term Assets Track Town Co. had the following transactions involving intangible assets: Jan. 1 Purchased a patent for leather soles for $13,560 and estimated its useful life to be 12 years. Apr. 1 Purchased a copyright for a design for $10,400 with a life left on the copyright of 20 years. The estimated remaining (economic) life of the copyright is five years. July 1 Signed a 6-year franchise agreement and opened a Starting Line high-tech running shoe store. Paid $65,400 to the franchisor. Required: 1. Using the straight-line method, calculate the amortization of the patent, copyright, and Franchise. a. Patent b. Copyright $ c. Franchise $ 2. Prepare general journal entries to record the end-of-year amortizations. Page: 1 DOC. POST. NO. REF. DATE ACCOUNT TITLE DEBIT CREDIT 20-- 1 Dec. 31 Patent Amortization (Expense) Patents 2 3 3 4 Dec. 31 Copyright Amortization (Expense) 4 Copyrights 6 7 Dec. 31 Franchise Amortization (Expense) 7 8 Franchise 8

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 10, 20X8, your firm purchases for $126,000 a machine with an estimated useful life of 8 years and a salvage value of $6,000. Your firm uses SYD depreciation and depreciates assets purchased between the 1st and 15th of the month for the entire month and assets purchased after the 15th as though they were acquired the following month. What is 20X1 depreciation expense $13,333 $11,111 $26,667 $13,889
Amortization and Depletion Entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: On December 31, the company determined that $1,030,000 of goodwill was impaired. Governmental and legal costs of $12,960,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 15 years. Amortization is to be for one-fourth of a year. Timber rights on a tract of land were purchased for $1,560,000 on February 4. The stand of timber is estimated at 6,500,000 board feet. During the current year, 1,800,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item Impairment, Amortization or Depletion Expense a. $fill in the blank 010092f4ffd4074_1 b. $fill in the blank 010092f4ffd4074_2 c. $fill in the blank…
Loban Company purchased, on January 1 for cash, four cars for $9,000 each and expects that they will be sold in 3 years for $1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first year’s depreciation expense. 2. If one of the cars is sold at the beginning of the second year for $7,000, what journal entry is required?
Subject: accounting
Determining Carrying Value and Amortization of Intangible Assets Review the following information pertaining to Denzel Company. 1. A patent was purchased on January 2 of Year 1 for $104,000 when the remaining legal life was 16 years. On January 2 of Year 3, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition. 2. On January 1 of Year 3, Denzel Company purchased a second patent for $128,000 cash. At January 1 of Year 3, a total of 6 years of the patent's legal life of 20 years had expired. 3. On June 30 of Year 3, Denzel Company paid a firm $12,800 for a new trademark. Denzel considers the life of the trademark to be indefinite. 4. On November 1 of Year 3, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $192,000. Denzel determined that the fair value of the identifiable net assets acquired in the transaction is $187,200. Required a. What is the carrying value…
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.
Depreciation by three methods; partial years Layton Company purchased tool sharpening equipment on October 1 for $44,550. The equipment was expected to have a useful life of 3 years or 5,400 operating hours, and a residual value of $1,350. The equipment was used for 1,000 hours during Year 1, 1,900 hours in Year 2, 1,600 hours in Year 3, and 900 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount Year 1 $fill in the blank 1 Year 2 $fill in the blank 2 Year 3 $fill in the blank 3 Year 4 $fill in the blank 4 b. Units-of-activity method Year Amount Year 1 $fill in the blank 5 Year 2 $fill in…
Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Company on January 1 for a cash cost of $4,000. When purchased, the patent had an estimated life of 10 years. b. A trademark was registered with the federal government for $11,000. Management estimated that the trademark could be worth as much as $260,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $36,000. The rights are expected to have a four-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
Batman Inc. uses revaluation accounting for its Machinery. The following information has been provided. July 7, 2022: Purchased Machinery for $250 000 on account. Estimated Useful Life: 10 years Residual Value: $0 Depreciation Method: Straight-line (nearest full month) Frequency of Revaluation: Annually Valuation Data July 7, 2022: $250 000 December 31, 2022: $234 000 December 31, 2023: $220 000 Prepare all necessary journal entries at December 31, 2022 and 2023.
Computing Subsequent Carrying Amount of Patents In January of Year 1, Ford Co. purchased a patent from a research institution for $325,000. The patent was estimated to have a useful life of 15 years. In December of Year 2, Ford Co. defended the patent in legal proceedings and successfully retained rights of ownership of the patent. The estimated life of the patent did not change from its original estimate Legal expenses on December 31 were $26,000. Determine the (1) amortization for Year 2, and (2) carrying value of the patent on December 31 of Year 2. Note: Round your final answers to the nearest dollar. 1. Amortization for Year 2 1 2. Carrying value on Dec 31, Year 25 25.214 x 302.572 x
Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. On December 31, the company determined that $750,000 of goodwill was impaired. b. Governmental and legal costs of $1,920,000 were incurred on September 30 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for one-fourth of a year. c. Timber rights on a tract of land were purchased for $320,000 on February 4. The stand of timber is estimated at 2,000,000 board feet. During the current year, 500,000 board feet of timber were cut and sold. Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation. Item Impairment, Amortization or Depletion Expense a. b. C. 2. Journalize the adjusting entries to record the amortization, depletion, or impairment for each item. If an amount box does not…
During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $28,000 cash (estimated useful life, seven years). b. On January 1, purchased another business for $164,000 cash, including $10,000 for goodwill. The assets included accounts receivable with a fair value of $12,000 and property and equipment with a fair value of $142,000 (with a residual value of $15,000 and estimated useful life of 10 years). The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost of the shed was $15,600. The company uses straight-line depreciation. The lease will expire in three years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs were $5,500 during the current year. e. On December 31 of the current year, sold Machine A for $6,000…