Q.1 Redwood Technologies acquired a patent on April 1, 2022. Redwood paid cash of $100,000 to the seller. Legal fees of $5,000 were paid related to the acquisition. What amount should be debited to the patent account? a. $5,000 b. $108,000 c. $95,000 d. $10,000 Q.2 Grayson Enterprises was recently sold for $3,500,000. Grayson's assets and liabilities consisted of the following: Item Cash Inventory Amount $200,000 $500,000 Property, Plant & Equipment (net) $1,200,000 $400,000 Accounts Payable Using this information, how much should be recorded as Goodwill for this transaction? Q.3 At January 1, 2023, Redwood Industries had accounts receivable of $120,000. At December 31, 2023, accounts receivable is $100,000. Sales for 2023 total $600,000. Compute Redwood's 2023 cash receipts from customers.
Q.1 Redwood Technologies acquired a patent on April 1, 2022. Redwood paid cash of $100,000 to the seller. Legal fees of $5,000 were paid related to the acquisition. What amount should be debited to the patent account? a. $5,000 b. $108,000 c. $95,000 d. $10,000 Q.2 Grayson Enterprises was recently sold for $3,500,000. Grayson's assets and liabilities consisted of the following: Item Cash Inventory Amount $200,000 $500,000 Property, Plant & Equipment (net) $1,200,000 $400,000 Accounts Payable Using this information, how much should be recorded as Goodwill for this transaction? Q.3 At January 1, 2023, Redwood Industries had accounts receivable of $120,000. At December 31, 2023, accounts receivable is $100,000. Sales for 2023 total $600,000. Compute Redwood's 2023 cash receipts from customers.
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 75P
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Please need answer the accounting question
Transcribed Image Text:Q.1 Redwood Technologies acquired a patent on April 1, 2022. Redwood paid cash of $100,000 to the seller.
Legal fees of $5,000 were paid related to the acquisition. What amount should be debited to the patent account?
a. $5,000
b. $108,000
c. $95,000
d. $10,000
Q.2 Grayson Enterprises was recently sold for $3,500,000. Grayson's assets and liabilities consisted of the following:
Item
Cash
Inventory
Amount
$200,000
$500,000
Property, Plant & Equipment (net)
$1,200,000
$400,000
Accounts Payable
Using this information, how much should be recorded as Goodwill for this transaction?
Q.3 At January 1, 2023, Redwood Industries had accounts receivable of $120,000. At December
31, 2023, accounts receivable is $100,000. Sales for 2023 total $600,000. Compute Redwood's
2023 cash receipts from customers.
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