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net of accumulated amortization,

net of accumulated amortization,

FINANCIAL ACCOUNTING
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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Presented below is selected information for Cullumber Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) 1. Cullumber purchased a patent from Vania Co. for $1,340,000 on January 1, 2020. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2030. During 2022, Cullumber determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the statement of financial position for the patent, net of accumulated amortization, at December 31, 2022? The amount to be reported $ 2. Cullumber bought a franchise from Dougherty Co. on January 1, 2021, for $3,150,000. The franchise agreement had an estimated useful life of 30 years. Because Cullumber must enter a competitive bidding at the end of 2030, it is unlikely that the franchise will be retained beyond 2030. What amount should be amortized for the year ended December 31, 2022? The amount to be amortized $ 804000 The amount to be reported $ 315000 3. On January 1, 2020, Cullumber incurred organization costs of $257,500. What amount of organization expense should be reported in 2022? 257500
Transcribed Image Text:Presented below is selected information for Cullumber Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) 1. Cullumber purchased a patent from Vania Co. for $1,340,000 on January 1, 2020. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2030. During 2022, Cullumber determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the statement of financial position for the patent, net of accumulated amortization, at December 31, 2022? The amount to be reported $ 2. Cullumber bought a franchise from Dougherty Co. on January 1, 2021, for $3,150,000. The franchise agreement had an estimated useful life of 30 years. Because Cullumber must enter a competitive bidding at the end of 2030, it is unlikely that the franchise will be retained beyond 2030. What amount should be amortized for the year ended December 31, 2022? The amount to be amortized $ 804000 The amount to be reported $ 315000 3. On January 1, 2020, Cullumber incurred organization costs of $257,500. What amount of organization expense should be reported in 2022? 257500
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