Springer Company had three Intangible assets at the end of 2020 (end of the accounting year):a. A copyright purchased on January 1, 2020, for a cash cost of $15,700. The copyright is expected to have a 10-year useful lIife toSpringer.b. Goodwill of $77,000 from the purchase of the Hartford Company on July 1, 2019.CA patent purchased on January 1, 2019, for $56,000. The inventor had registered the patent with the U.S. Patent and TrademarkOffice on January 1, 2015. Springer intends to use the patent for its remalning life.Required:1. Compute the amortization expense of each intangible for the year ended December 31, 2020. The company does not use contra-accounts.2a. Show how the expenses related to the three intangible assets should be reported on the Income statement for 2020.2b. Show how the three intangible assets should be reported on the balance sheet for 2020. (Assume there has been no Impairmentof goodwill.)

The company has three intangible assets: Copyright Goodwill Patent The life of the "Copyright" is…

Answered: Springer Company had three Intangible…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.
Grand Champion Inc. purchased America’s Sweethearts Corporation on January 1, 2019. At the time, America’s Sweethearts had the following assets and liabilities (stated at fair value): Cash $62,000 Accounts receivable 138,000 Inventory 185,000 Property, plant, and equipment 300,000 Patent 65,000 Accounts payable 200,000 Notes payable 325,000 Grand Champion paid $900,000 for America’s Sweethearts. Assume that America’s Sweethearts is a reporting unit of Grand Champion. At the end of 2020, America’s Sweethearts has a fair value of $720,000 and a book value of $850,000, which includes any goodwill recorded. Of this fair value, $350,000 is attributable to identifiable assets net of (or identifiable net assets) liabilities. Required: Calculate the impairment loss of goodwill (if any) and record the appropriate journal entry.
Skysong Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $44,268 3/1/16 17 years Patent B $17,040 7/1/17 10 years Patent C $22,560 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $247,000 were incurred during the year. 2. Patent D was purchased on July 1 for $37,848. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2020. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,200 2022 2,200 2023 2,200 The proper discount rate to be used for these flows is 8%. (Assume that the…
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What is the correct journal entry?
Information concerning Blue Corporation's intangible assets is as follows. On January 1, 2025, Blue signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2026. The agreement provides that the down payment is not refundable and no future services are required f the franchisor. The present value at January 1, 2025, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $57,100. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Blue's revenue from the franchise for 2025 was $870,000. Blue estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) Blue incurred…
Conrad Inc. purchased a patent for $2,900,000 for "a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails." Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. Required: 1. This part of the question is not part of your Connect assignment. 2. Prepare the journal entries to record the purchase and amortization of the switch plate patent in 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 Event No 1 a b Event Patent a Answer is complete but not entirely correct. Bad debt expense Amortization expense Patent Impairment loss Patent General Journal Debit 29,000,000 X 3. After a year of unsuccessful attempts to…
Barb Company has provided information on intangible assets as follows: A patent was purchased from Lou Company for $1,500,000 on January 1, 2018. Barb estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou's accounting records at a net book value of $1,250,000 when Lou sold it to Barb. During 2019, a franchise was purchased from Rink Company for $500,000. In addition, 5% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,000,000. Barb estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase. Barb incurred R&D costs in 2019 as follows: Materials and equipment $120,000 Personnel 140,000 Indirect costs 60,000 $320,000 Barb estimates that these costs will be recouped by December 31, 2020. On January 1, 2019, Barb estimates, based on new events, that the remaining life of the patent purchased on January 1, 2018, is only 5 years…
Question bord Date an 1 ept. 1 Mar. 1 ept. 1 Question 6 of 6 K.31 ept. 1 ✓ Account Titles and Explanation Cost of Goods Sold Cash Cash expenses cash Bank Loan Payable Cash Trademarks (To record purchase of trademark) Cash Trademarks (To record purchase of trademark) Trademarks (To record costs incurred to defend trademark) Advertising Expense Accounts Receivable Furniture Leasehold Improvements Cash Debit 117480 500850 106340 106340 106340 640000 Credit 117400 462000 106340 306340 38820 106340 106340 10000 58000 170000 320000 92000 P SUP
The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $223,000 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs < 1 Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total View transaction list Journal entry worksheet Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions.…
an entity acquired furniture and fittings on 1 July 2021 for $42 000. The estimated useful life of the furniture and fittings at acquisition date was 8 years and the residual value was $2000. The company sold all the furniture and fittings on 1 January 2027 for $18 000. The journal entry to reflect the sale is:
Marigold Company purchases a patent for $504,000 on January 2, 2022. Its estimated useful life is 18 years. Prepare the journal entry to record amortization expense for the first year.

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