Given answer accounting questions Rolanda Marshall Company, organized in 2006, has set up a singleaccount for all intangible assets. The following summary discloses thedebit entries that have been recorded during 2007.4/1/07 Purchased goodwill (indefinite life)1/2/07 Purchased patent (8-year life)$350,000360,0007/1/07 Purchased franchise with 10-year life; expiration450,000date 7/1/178/1/07 Payment of copyright (5-year life)156,0009/1/07 Research and development costs215,000$1,531,0001. Prepare the necessary entries to clear the Intangible Assets accountand to set up separate accounts for distinct types of intangibles.2. Make the entries as of December 31, 2007, recording any necessaryamortization and reflecting all balances accurately as of that date.The magnitude of operating leverage for Perkins Corp is 2.5 when salesare $100,000. If sales increase to $110,000 profits would be expected toincrease by what percent?

Step 1: Define Intangible AssetsThe assets can be divided into two categories namely tangible asset…

Answered: Rolanda Marshall Company, organized in…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Cullumber Limited organized late in 2022 and set up a single account for all intangible assets. The following summary shows the entries in 2023 (all debits) that have been recorded in Intangible Assets since then: Jan. 2: Purchased patent (8-year life) - $342,000 Mar. 31: Costs to search for new ways to apply patent that was purchased on Jan. 2 - $21,000 Apr. 1: Purchased goodwill (indefinite life) - $315,000 July 1: Purchased franchise with 10-year life; expiration date July 1, 2033 - $248,000 July 1: Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 - S 33,000 Aug. 1: Payment for copyright (5-year life) - $132,000 Aug. 1: Purchased trademark (3-year life) - $14,400 Aug. 1: Purchased customer lists (2-year life) S9, 600 Sept. 1: Research costs - $234,000 Total: $1,349,000
4
Pharoah Company, organized in 2022, has the following transactions related to intangible assets. 1/2/22 Purchased patent (7-year life) $605,500 4/1/22 Goodwill purchased (indefinite life) 360,000 7/1/22 Acquired 10-year franchise; expiration date 7/1/2032 600,000 9/1/22 Incurred research and development costs 182,000 (a1) Prepare the necessary entries to record these transactions. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
During 2022, Pfeiffer Co. purchased intangible assets and debited them all to "Intangible assets". 1-Jan Research and development costs $52,000 1-Jun Goodwill Indefinite Life $64,000 1-Oct Patent 7-Year Life $252,000 (a). Prepare a journal entry to reclassify them to an intangible asset account and/or expense account. (b). Prepare a journal entry to record amortization expense as of December 31, 2022.
Swifty Company, organized in 2020, has the following transactions related to intangible assets. 1/2/22 Purchased patent (5-year life) $385,000 4/1/22 Purchased a small compaly and as a result recorded goodwill. (indefinite life) 360,000 7/1/22 Acquired 12-year franchise; expiration date 7/1/2032 456,000 9/1/22 Incurred research and development costs 194,000 Prepare the necessary entries to record these intangibles (all costs incurred were for cash) and calculate ending balances as at 12/31/22.
Oo.23. Subject :- Account
Pharoah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then: Jan. 2 Purchased patent (8-year life) $338,000 Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000 Apr. 1 Purchased goodwill (indefinite life) 307,000 July 1 Purchased franchise with 10-year life; expiration date July 1, 2030 259,000 1 Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 33,000 Aug. 1 Payment for copyright (5-year life) 142,800 1 Purchased trademark (3-year life) 14,400 1 Purchased customer list (2-year life) 9,600 Sept. 1 Research costs 236,000 $1,360,800 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.
Ivanhoe Company, organized in 2022, has these transactions related to intangible assets in that year: Jan. Purchased a patent (5-year life) $305,500. Apr. 1. Goodwill purchased (indefinite life) $338,400. July Acquired a 9-year franchise; expiration date July 1, 2031, $676,800. Sept. 1 Research and development costs $173,900.
Lake Company, organized in 2020, has the following transactions related to intangible assets in that year. Lake Company uses the calendar year for financial reporting. 1/1/2020 Purchased patent (9-year life) $540,000 4/1/2020 Purchased trademarks (indefinite life) 240,000 7/1/2020 Purchased copyright on artwork; expiration date 7/1/2035 345,000 12/31/2020 Research and development costs 217,000 Enter your answers below in whole dollars without a $ sign (e.g., xxx). How much expense will Lake Company recognize in 2020 due to the purchased patent? How much expense will Lake Company recognize in 2020 due to the purchased trademarks? How much expense will Lake Company recognize in 2020 due to the purchased copyright? How much expense will Lake Company recognize in 2020 due to its Research and development? Based on the above, what is the net book value of total intangible assets that Lake Company’s balance sheet will show on Dec. 31,…
Lake Company, organized in 2020, has the following transactions related to intangible assets in that year. Lake Company uses the calendar year for financial reporting. 1/1/2020 Purchased patent (9-year life) $540,000 4/1/2020 Purchased trademarks (indefinite life) 240,000 7/1/2020 Purchased copyright on artwork; expiration date 7/1/2035 345,000 12/31/2020 Research and development costs 217,000 Enter your answers below in whole dollars without a $ sign (e.g., xxx). a. How much expense will Lake Company recognize in 2020 due to the purchased patent? b. How much expense will Lake Company recognize in 2020 due to the purchased trademarks? c. How much expense will Lake Company recognize in 2020 due to the purchased copyright? d. How much expense will Lake Company recognize in 2020 due to its Research and development? e. Based on the above, what is the net book value of total intangible assets that Lake Company's balance sheet will show on Dec. 31, 2020?
6. Kyle and Payton Shop, organized in 2017, has the following transactions relating to intangible assets for the past two fiscal years. Kyle and Payton Shop fiscal year end is 12/31. 1/1/2017 Purchased a copyright with a ten-year useful life, $350,000 6/30/2017 Goodwill recognized as part of an acquisition, $250,000 6/30/2018 Successfully defended the copyright purchased on 1/1/2017, incurring legal costs of $127,500 11/30/2019 Incurred research and development costs, $100,000 Using the information from the transactions provided above, what amount does Kyle and Payton Shop report as ending balance of copyright in 2019? a. 350,000 b. 477,850 c. 442,500 d. 400,000

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