This is my 3rd attempt to get a question answered. Here we go again..My question is related to the patents. The company purchased 500,000. What are the steps for amoritizing on a straight-line basis with no salvage value? The estimated useful life of patents is 30 years and on December 31 2020 the value of the patent is estimated to be 100,000. I think it is a decline however unsure of how to show it on the journal. Brown Company paid cash to purchase the assets of Coffee Companyon January 1, 2019. Information is as follows:Total cash paidAssets acquired:S3,500,000s800,000$500,000S900,000$500,000LandBuildingMachineryPatentsThe building is depreciated using the double-dedining balancemethod. Other information is:Salvage valueEstimated useful life in years$50,00040The machinery is depreciated using the units-of-production method.Other information is:10%Salvage value, percentage of costEstimated total production output inActual production in units was as200,00040,00060,00020,000201920202021The patents are amortized on a straight-line basis. They have no salvage valu.Estimated useful life of patents in30On December 31, 2020, the value of thepatents was estimated to be$100,000Where applicable, the company uses the % year rule to calculatedepreciation and amortization expense in the years of acquisitionand disposal. Its fiscal year-end is December 31.The machinery was traded on December 2, 2021 for new machinery.Other information is:Fair value of old machinery$240,000Trade-in allowance$288,000List price for new machineryEstimated useful life of new machinery in$403,20020Estimated salvage value of newThe new machinery is depreciated using the straight-line method and$8,084On August 14, 2023, an addition was made. This amount wasmaterial. Other relevant information is as follows:Amount of addition, paid in cash$100,000Number of years of useful life from 2023(original machinery and addition):Salvage value, percentage of addition3010%Required: Prepare journal entries to record:1 The purchase of the assets of Coffee.2 Depreciation and amortization expense on the purchased assets for 2019.3 The decline (if any) in value of the patents at December 314 The trade-in of the old machinery and purchase of the new5 Depreciation on the new machinery for 2021.6 Cost of the addition to the machinery on August 14, 2023.7 Depreciation on the new machinery for 2023.

Name: This is my 3rd attempt to get a question answered. Here we go again..M
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: This is my 3rd attempt to get a question answered. Here we go again..My question is related to the patents. The company purchased 500,000. What are the steps for amoritizing on a straight-line basis with no salvage value? The estimated useful life of