Saint John Corporation prepares its financial statements according to IFRS. On June 30, 2018, the company purchased a franchise for $1,200,000. The franchise is expected to have a 10-year useful life with no residual value.Saint John uses the straight-line amortization method for all intangible assets. On December 31, 2018, the end ofthe company’s fiscal year, Saint John chooses to revalue the franchise. There is an active market for this particularfranchise and its fair value on December 31, 2018, is $1,180,000.Required:1. Calculate amortization for 2018.2. Prepare the journal entry to record the revaluation of the patent.3. Calculate amortization for 2019.
Saint John Corporation prepares its financial statements according to IFRS. On June 30, 2018, the company purchased a franchise for $1,200,000. The franchise is expected to have a 10-year useful life with no residual value.Saint John uses the straight-line amortization method for all intangible assets. On December 31, 2018, the end ofthe company’s fiscal year, Saint John chooses to revalue the franchise. There is an active market for this particularfranchise and its fair value on December 31, 2018, is $1,180,000.Required:1. Calculate amortization for 2018.2. Prepare the journal entry to record the revaluation of the patent.3. Calculate amortization for 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Saint John Corporation prepares its financial statements according to IFRS. On June 30, 2018, the company purchased a franchise for $1,200,000. The franchise is expected to have a 10-year useful life with no residual value.
Saint John uses the
the company’s fiscal year, Saint John chooses to revalue the franchise. There is an active market for this particular
franchise and its fair value on December 31, 2018, is $1,180,000.
Required:
1. Calculate amortization for 2018.
2. Prepare the
3. Calculate amortization for 2019.
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