On January 1, 2020, Dopey Enterprises, Inc. developed a new machine that reduces the time requiredto insert the fortunes into their fortune cookies. Because the process is considered very valuable to thefortune cookie industry, Dopey had the machine patented. The following expenses were incurred indeveloping and patenting the machine:Research and development laboratory expensesP250,00080,00032,000120,000Metal used in construction of the machineBlueprints used to design the machineLegal expenses to obtain patentWages paid for the employees on the research, development andthe building of the machine; 60% of the time was spent in actualbuilding of the machineExpense of drawing required by the patent office to be submitted withthe patent applicationFees paid to government patent office to process application150,00017,00024,500On January 2, 2021, Dopey Enterprises, Inc. paid P35,200 in legal fees to successfully defend the patentagainst an infringement suit by Snow White Company. What is the carrying value of the patent inDecember 31, 2021?

On January 1, 2020 Dopey Enterprises, Inc. developed a new machine that reduces the time required to…

On January 2, 2021, Dopey Enterprises, Inc. paid P35,200 in legal fees to successfully defend the patent against an infringement suit by Snow White Company. What is the carrying value of the patent in December 31, 2021?

On January 2, 2021, Dopey Enterprises, Inc. paid P35,200 in legal fees to successfully defend the patent against an infringement suit by Snow White Company. What is the carrying value of the patent in December 31, 2021?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

(b) Zahir Berhad has the following assets on 31 December 2019. (i)A moulding machine with a carrying value of RM1.25 million. At 31 December 2019, the company stopped using the machine as it recently acquired an up-to-date moulding machine. The company keeps the machine and care for its maintenance just in case it would be needed as a backup. On 15 February 2020, company’s client has offered to buy the machine for RM1.1 million and the sale was completed in March 2020. (ii)A property which is currently advertised through a major estate agent in Serdang for sale at RM4 million. The property was listed for sale in November 2019 and so far no buyer has been found. The company is hopeful of a sale. On 14 January 2020, an offer of RM3.9 million was received for the property and the sale was completed on 28 February 2020. The financial statements were authorised for issue on 10 March 2020. Required: Explain the accounting treatment as per requirement under MFRS 5 Non-Current Assets Held for…
Sunland Company self-insures its property for fire and storm damage. If the company were to obtain insurance on the property, it would cost them $1970000 per year. The company estimates that on average it will incur losses of $1610000 per year. During 2021, $705000 worth of losses were sustained. How much total expense and/or loss should be recognized by Sunland Company for 2021?
In May 2019, Colt Company filed suit against Johnson Company seeking P1,900,000 damages for patent infringement. A court verdict in November 2019 awarded Colt Company P1,500,000 in damages, but Johnson Company's appeal is not expected to be decided before 2020. The legal counsel believed it is probable that Colt Company will be successful against Johnson Company for an estimated amount in the range between P800,000 and P1,100,000, with P1,000,000 considered the most likely amount. What amount should Colt Company record as income from the lawsuit for the December 31, 2019? year ended
During 2020, Lomi, Co.filed suit against Ocean, Inc seeking damages for patent infringement. At December 31, 2020. Lomi’s legal counsel believed that it was probable that Lomi would be successful against Ocean for an estimated amount of P 1,500,000. In March 2021, Lomi was awarded P 1,000,000 and received in full payment thereof. In Lomi’s 2020 financial statements issued February 2021, how should this award be reported? a. As a receivable and revenue of P 1,500,000b. As a receivable and revenue of P 1,000,000c. As a disclosure of a contingent asset of P 1,500,000d. As a disclosure of a contingent asset of P 1,000,000
Tyeso Company entered into a lawsuit on December 25, 2020 and recognized on the same date a provision of P2,000,000. On February 28, 2021, when the financial statements for the year ended December 31, 2020 had not yet been authorized for issue, the case was settled and the court decided the final total damages to paid by the entity at P3,000,000. In addition, the Company has a loan payable of P2,000,000 due on June 30, 2021. On January 1, 2021, before the authorization of the issuance of financial statements, the bank agreed to refinance the loan, extending the maturity to June 30, 2023. Also, another loan amounting to P7,000,000 due on December 1, 2021 was obtained by the Company from BDO. TYESO Company has the discretion to refinance or roll over the loan for at least twelve months from December 31, 2021. 1. Compute for the current liability to be presented in the financial position a. P12 million b. P10 million c. P5 million d. P4 million Answer: 2. Compute for…
Furtastic manufactures imitation fur garments. On June 1, 2024, Furtastic made a sale to Willett's Department Store under terms that require Willett to pay $220,000 to Furtastic on June 30, 2024. In a separate transaction on June 15, 2024, Furtastic purchased brand advertising services from Willett for $26,000. The fair value of those advertising services is $12,000. Furtastic expects that 3% of all sales will prove uncollectible. Required: 1. Prepare the journal entry to record Furtastic's sale on June 1, 2024. 2. Prepare the journal entry to record Furtastic's purchase of advertising services from Willett on June 15, 2024. Assume all of the advertising services are delivered on June 15, 2024. 3. Prepare the journal entry to record Furtastic's receipt of $220,000 from Willett on June 30, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet
Swifty Company incurred $551000 of research and development cost in its laboratory to develop a patent granted on January 1, 2027. On July 31, 2027, Swifty paid $83600 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31, 2027, is
A court case decided on December 2020 awarded damages against Talunan Corp. The judge has announced that the amount of damages will be set at a future date, expected to be in March 2021. Talunan Corp has received advice from its lawyers that the amount of the damages could be anything between P400,000 and P1,400,000. As of December 31, 2020, how much liability should be recognized in the balance sheet regarding this court case? P900,000 b. P1,400,000 c. P400,000 d. P0
During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On October 1, 2020. Maricar was notified that the supplier had defaulted on the loan and filed for bankruptcy protection. The counsel believes Maricar will probably have to pay between P2,500,000 and P4,500,000 under its guaranty. As a result of the supplier’s bankruptcy, Maricar entered into a contract in December 2020, to retool its machines so that Maricar could accept parts from other suppliers. Retooling costs are estimated to be P3,000,000. What amount should Maricar report as a liability in its December 31, 2020 balance sheet? Group of answer choices A.) 4,500,000 B.) 5,000,000 C.) 5,500,000 D. ) 2,500,000
On January 1,2019, Agri LTD sold a machine for $10,000, with a 2 year warranty guarantee that the machine was free from any defects. The customer also purchased a 1-year extended warranty for the machine for additional $50. In which year, should Agri Ltd receive the revenue earned from the 1-year extended warranty? a)2019 b) 2020 c) 2021 d) 2022 e) None of the above
In 2021, a lawsuit was filed against Keri Keri Co. for patent infringement. The plaintiff is claiming ₱400M in damages. Keri Keri’s legal counsel believes that it is probable that Keri Keri will lose the lawsuit and pay damages of not less than ₱40M but not more than ₱400M. The probability of any amount within the range is as likely as any other amount also within the range. The plaintiff has offered to settle the lawsuit out of court for ₱360M but Keri Keri did not agree to the settlement.How much is provision to be reported in Keri Keri’s year-end financial statements? a. P360,000,000 b. P220,000,000 c. P400,000,000 d. P40,000,000