Maynard Printers (MP) manufactures printers. Assume that MP recently paid $450,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only eight years. Read the requirements Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a) Record the purchase of the patent. Date Accounts and Explanation Debit Credit (b) Record the amortization for the first full year. Date Accounts and Explanation Debit Credit Requirement 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Requirements 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. Print Done
Maynard Printers (MP) manufactures printers. Assume that MP recently paid $450,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only eight years. Read the requirements Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) (a) Record the purchase of the patent. Date Accounts and Explanation Debit Credit (b) Record the amortization for the first full year. Date Accounts and Explanation Debit Credit Requirement 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Requirements 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Maynard Printers (MP) manufactures printers. Assume that MP recently paid $450,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only eight years.
Read the requirements
Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
(a) Record the purchase of the patent.
Date
Accounts and Explanation
Debit
Credit
(b) Record the amortization for the first full year.
Date
Accounts and Explanation
Debit
Credit
Requirement 2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5. (Record debits first, then credits. Select the explanation on the last line of the
journal entry table.)
Date
Accounts and Explanation
Debit
Credit
Requirements
1. Assuming the straight-line method of amortization, make journal entries to
record (a) the purchase of the patent and (b) amortization for the first full year.
2. After using the patent for four years, MP learns at an industry trade show that
another company is designing a more efficient printer. On the basis of this
new information, MP decides, starting with Year 5, to amortize the remaining
cost of the patent over two remaining years, giving the patent a total useful life
of six years. Record amortization for Year 5.
Print
Done
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