On January 2, 2022, BrightTech Corporation purchased a patent for $320,000 plus $10,000 in legal fees. On that date, the patent had a remaining legal life of 15 years. However, BrightTech Corporation expects to use the patent for only 6 years, after which it will have no residual value. How much is the annual amortization expense for 2022?
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How much is the annual amortization expense for 2022 on these financial accounting question?
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- Isla Innovations purchased a patent on 1 August 2020 for $360,000. The economic benefits were expected to last 10 years, but the patent's legal life was 20 years. Also, during 2020/21, Isla incurred research and development costs of $180,000. What is the carrying amount of the patent on 31 July 2021?On March 1, 2020, Tebow Company purchased a patent for $158,000 cash. Although the patent gives legal protection for 19 years, the patent will be used for only 2 years. Assume straight-line amortization. Amortization per unit (Cost Res. Value)/Time = Amortization per year Amortization per year X portion of year = Amortization Journalize a) the purchase of the patent, and b) the amortization expense of the patent as of December 31, 2020. Date a b Check All Parts Description Debit CreditCrane Manufacturing Company acquired a patent on a manufacturing process on January 1, 2020 for $5550000. It was expected to have a 10 year life and no residual value. Crane uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $510000 per year for the next eight years. The present value of these cash flows, discounted at Crane's market interest rate, is $2675000. At what amount should the patent be carried on the December 31, 2021 balance sheet? $4080000. $5550000. $4440000. $2675000.
- A company buys an oil rig for $2,400,000 on January 1, 2018. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $609,000 (present value at 12% is $196,080). 12% is an appropriate interest rate for this company. What expense should be recorded for 2018 as a result of these events?Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2025, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when 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. List all debit entries before credit entries.) Account Titles and Explanation Patents cash (To record purchase of patents) Amortization Expense Patents (To record amortization of patents) Debit 24,000 8400 Credit 24,000 24,000On January 1, 2020, Purple Inc. purchased a patent for $33, 300. Legal fees paid in this purchase amounted to $1,700. The legal remaining life of the patent is 14 years, but Purple believes it will only help increase sales for the next 10 years. On January 1, 2023, Purple was sued for patent infringement and had to spend $4,900 of legal fees in the successful defense of this patent. What is the book value of this patent on December 31, 2023? Select one: a. $24,500 b. $21,000 c. $ 25,200 d. $30, 240 e. $19,600
- Ayayai Corporation purchases a patent from Blossom Company on January 1, 2025, for $63,000. The patent has a remaining legal life of 14 years. Ayayai estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Ayayai's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when 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. List all debit entries before credit entries.) Account Titles and Explanation (To record purchase of patents) (To record amortization of patents) Debit CreditA company buys an oil rig for P1,200,000 on January 1, 2020. The life of the rig is 12 years and the expected cost to dismantle the rig at the end of 12 years is P300,000 (present value factor of 1, 12% for 12 years is 0.2567). 12% is an appropriate interest rate for this company. What is the total expense should be recorded for 2020 as a result of these events?Crane Company acquired a patent on an oil extraction technique on January 1, 2020 for $805000O. It was expected to have a 10 year life and no residual value. Crane uses straight-line amortization for patents. On December 31, 2021, the future cash flows expected from the patent were $1065000 per year for the next eight years. The present value of these cash flows, discounted at Crane's market interest rate, is $4475000. At what amount should the patent be carried on the December 31, 2021 balance sheet? O $8050000. O $6440000. O $8520000. O $4475000.
- Sandstorm Corporation decides to develop a new line of paints. The project begins in 2018. Sandstorm incurs the following expenses in 2018 in connection with the project:Salaries: $85,000Materials: $30,000Depreciation on equipment: $12,500The benefits from the project will be realized starting in July 2019. If an amount is zero, enter "0".If Sandstorm Corporation elects a 60-month deferral and amortization period, there is a $ for 2018 and a $ deduction for 2019.On January 1, 2024, Sheridan Ltd. leased a machine from Carla Vista Equipment Ltd. The machine had cost Carla Vista $416,500 to manufacture, and would normally have sold for about $595,000. The lease was for 10 years and requires equal monthly payments of $6,490, which reflects an annual interest rate of 8%. While the machine is expected to have a total useful life of 12 years, Sheridan’s management plans to return it to Carla Vista at the end of the 10-year lease. Sheridan’s management has also determined that the present value of the minimum lease payments was $534,915 at the time the lease was entered into. A.Calculate the impact that the lease will have in the first month on Sheridan’s statement of financial position. (Round answers to 0 decimal places, e.g. 125.) Right-of-use asset at the end of January. $______:1 Lease liability at the end of January $______:1 B. Calculate the impact that the lease will have in the first month on Sheridan’s statement of income.…a