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On January 1, 2027, Sheridan Company had a balance of $417,000 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 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 $ Assets Patents + Franchise $ $

On January 1, 2027, Sheridan Company had a balance of $417,000 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 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 $ Assets Patents + Franchise $ $

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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On January 1, 2027, Sheridan Company had a balance of $417,000 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 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 July 1 $ Assets Patents + $ Franchise $
Transcribed Image Text:On January 1, 2027, Sheridan Company had a balance of $417,000 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 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 July 1 $ Assets Patents + $ Franchise $
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