PREG 22 Blossom Company has provided information on intangible assets as follows. A patent was purchased from Kingbird Company for $1,750,000 on January 1, 2019. Blossom estimated the remaining usefullife of the patent to be 10 years. The patent was carried in Kingbird's accounting records at a net book value of $1,750,000 when Kingbird sold it to Blossom. During 2020, a franchise was purchased from Pina Company for $520,000. In addition, 5% of revenue from the franchise must be paid to Pina. Revenue from the franchise for 2020 was $2,400,000. Blossom estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Blossom incurred research and development costs in 2020 as follows. Materials and equipment $153,000 Personnel 197,000 Indirect costs 117,000 $467,000 Blossom estimates that these costs will be recouped by December 31, 2023. The materials and equipment purchased have no alternative uses. On January 1, 2020, because of recent events in the field, Blossom estimates that the remaining life of the patent purchased on January 1, 2019, is only 5 years from January 1, 2020.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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12 mayo 11:02 preg 22
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