Do not give answer in image On January 1, 2022, Cullumber Company had a balance of $359.500 of goodwill on its balance sheet that resulted from the purchaseof a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additionaltransactions.Jan.2 Purchased a patent (6-year life) $324,450.Acquired a 8-year franchise; expiration date July 1, 2,030, $612,000.Research and development costs $184,000.July 1Sept. 1 x Your answer is incorrect.Indicate what the intangible asset account balances should be on December 31, 2022.Goodwill $PatentFranchise$$05407538250

Amortization is the process of reducing the value of intangible asset over the specified…

On January 1, 2022. Cullumber Company had a balance of $359.500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. Purchased a patent (6-year life) $324,450. July 1 Acquired a 8-year franchise; expiration date July 1, 2,030, $612,000. Sept. 1 Research and development costs $184,000. Jan. 2

On January 1, 2022. Cullumber Company had a balance of $359.500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. Purchased a patent (6-year life) $324,450. July 1 Acquired a 8-year franchise; expiration date July 1, 2,030, $612,000. Sept. 1 Research and development costs $184,000. Jan. 2

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 2BCRQ

See similar textbooks

Similar questions

On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.
Cox Construction, a company in its 10th year of business, purchased a piece of equipment on April 1, year 9, for 20,000. Cox has used it for business purposes since the initial purchase date. The company depreciated the equipment using the MACRS half-year table for 5-year assets. For tax purposes, what is the amount of accumulated depreciation expense for the equipment as of December 31, year 10? a. 6,000 b. 10,400 c. 11,600 d. 12,800
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.
Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.
On January 1, 2025, Crane Company had a balance of $374,400 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2025, the company had the following additional transactions. Jan. 2 Purchased a patent (5-year life) $291,200. Acquired a 9-year franchise; expiration date July 1, 2034, $561,600. Research and development costs $192,400. 1 July Sept. 1 Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash. (List debit entry before credit entry. Record entries in the order displayed in the problem statement. 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 amounts.) Date Account Titles and Explanation Debit Credit.
On January 1, 2025, Oriole Company had a balance of $316800 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2025, the company had the following additional transactions Jan July Sept. 1 2 Purchased a patent (5-year life) $246,400 1 Acquired a 9-year franchise; expiration date July 1, 2034, $475,200 Research and development costs $162,800 Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash (List debit entry before credit entry Record entries in the order displayed in the problem statement. 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 for the amounts) Date: Account Titles and Explanation eTextbook and Media List of Accounts Debit Credit
Springer Company had three Intangible assets at the end of 2020 (end of the accounting year): a. A copyright purchased on January 1, 2020, for a cash cost of $15,700. The copyright is expected to have a 10-year useful lIife to Springer. b. Goodwill of $77,000 from the purchase of the Hartford Company on July 1, 2019. CA patent purchased on January 1, 2019, for $56,000. The inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2015. Springer intends to use the patent for its remalning life. Required: 1. Compute the amortization expense of each intangible for the year ended December 31, 2020. The company does not use contra- accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the Income statement for 2020. 2b. Show how the three intangible assets should be reported on the balance sheet for 2020. (Assume there has been no Impairment of goodwill.)