The following information is available for K Company for the year ended 2021. It incurred organization costs of $45,200. • It purchased trademarks for $20,200. ● ● ● It incurred $31,200 for development phase activities that meets all the 6 criteria for development phase. It paid $8,100 to the advertising agency in advance for promoting goodwill of the company through ad campaign. It acquired equipment costing $151,400 for R&D projects. The equipment is having alternative future use. It made payment amounting to $12,900 for a favorable lease. The term of lease is 10 years. Determine the total amount for K to report as intangible assets on its statement of financial position on December 31, 2021. (Note: Assume K uses IFRS to prepare its financial statements.) A) $109,500 B) $179700 C) $100,800 D) $64,300

The following information is available for K Company for the year ended 2021. It incurred organization costs of $45,200. • It purchased trademarks for $20,200. ● ● ● It incurred $31,200 for development phase activities that meets all the 6 criteria for development phase. It paid $8,100 to the advertising agency in advance for promoting goodwill of the company through ad campaign. It acquired equipment costing $151,400 for R&D projects. The equipment is having alternative future use. It made payment amounting to $12,900 for a favorable lease. The term of lease is 10 years. Determine the total amount for K to report as intangible assets on its statement of financial position on December 31, 2021. (Note: Assume K uses IFRS to prepare its financial statements.) A) $109,500 B) $179700 C) $100,800 D) $64,300

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Oki Company pays $283,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment. 1. Paid $20,250 cash for a new component that increased the equipment's productivity. 2. Paid $5,063 cash for minor repairs necessary to keep the equipment working well. 3. Paid $13,200 cash for significant repairs to increase the useful life of the equipment from four to seven years. View transaction list Journal entry worksheet > Record the betterment cost of $20,250 paid in cash. Note: Enter debits before credits. Debit Credit Transaction General Journal 1 MacBook Air
Wiater Company operates a small manufacturing facility. On January 1, 2021, an asset account for the company showed the following balances: Equipment Accumulated Depreciation (beginning of the year) $ 344,000 212,000 During the first week of January 2021, the following cash expenditures were incurred for repairs and maintenance: Routine maintenance and repairs on the equipment Major overhaul of the equipment that improved efficiency $ 3,550 41,000 The equipment is being depreciated on a straight-line basis over an estimated life of 15 years with a $26,000 estimated residual value. The annual accounting period ends on December 31. Required: - Indicate the effects (accounts, amounts, and + for increase and – for decrease) of the following two items on the accounting equation, using the headings shown below. (Enter any decreases to Assets, Liabilities or Stockholder's Equity with a minus sign.) 1. The adjustment for depreciation made last year at the end of 2020. 2. The two expenditures…
Cala Manufacturing purchases land for $297,000 as part of its plans to build a new plant. The company pays $27,300 to tear down an old building on the lot and $40,356 to fill and level the lot. It also pays construction costs of $1,791,300 for the new building and $113,072 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. View transaction list Journal entry worksheet A Record the total costs of the plant assets. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Land 297,000 Building Land improvements Record entry Clear entry View genera
Lark Corp. appropriately determined that each of its long-term projects represents a single performance obligation that is satisfied over time. At the end of the current year, Lark estimates that its costs to complete a project exceed the contract price, so that an overall loss on the contract is anticipated. Required: What journal entry will Lark record at the end of the current year, given the following information? • Revenue to date is $350,000 ($175,000 of which is to be recognized in the current year). • The expense recognized previously was $100,000. • An overall loss of $30,000 is anticipated
A company's research department incurred $1,000,000 in material, labor, and overhead costs to construct a prototype of a new product and $100,000 to test and modify the prototype. Which of the following statements correctly describes the accounting treatment of prototype costs incurred by the company? 1. Capitalize $1,100,000 and amortize it over the expected sales life of the new product 2. Capitalize $1,100,000 and amortize it over the life of the prototype. 3. Capitalize $1,000,000 and amortize it over the life of the prototype and expense $100,000 as incurred. 4. Expense $1,100,000 as incurred.
West Coast Growers incurs the following costs during the year related to the creation of a new disease-resistant tomato plant.Salaries for R&D $ 540,000 Depreciation on R&D facilities and equipment 145,000 Utilities incurred for the R&D facilities 7,000 Patent filing and related legal costs 27,000 Payment to another company for part of the development work 13,000What amount should West Coast Growers report as research and development (R&D) expense in its income statement?
Consider the following information from a company's records for 2020: Materials used in research and development projects $4,500 Equipment acquired that will have alternative future uses in future R&D projects for five years 1,500 Personnel costs of employees involved in R&D projects 5,500 Consulting fees paid to outsiders for R&D projects 2,800 Indirect costs reasonably allocable to R&D projects 250 Legal fees associated with registration of a patent resulting from a 2020 R&D project 2,500 Required:Compute the amount of R&D costs that should be classified as expenses in determining 2020 net income. $ _______
Cozy Inc. incurred and paid the following costs during the year ended December 31, 2021: Laboratory research aimed at discovery of new knowledge $200,000 Costs of testing prototype and design modifications (economic viability not achieved) 45,000 Quality control during commercial production, including routine testing of products 270,000 Construction of research facilities having an estimated useful life of 6 years but no alternative future use 360,000 The journal entry for the total amount to be classified and expensed as research and development in 2021 is:
Candalibra Company incurred the following costs during the year ended December 31, 2018: Laboratory research aimed at discovery of new knowledge $300,000 Costs of testing prototype and design modifications (economic viability not achieved) 55,000 Quality control during commercial production, including routine testing of products 210,000 Construction of research facilities having an estimated useful life of 12 years but no alternative future use 440,000 What is the total amount to be classified and expensed as research and development in 2018 under U.S. GAAP? 79
The following information relates to Question 2 and 3: On July 1, 2018, Gene Parmesan's Genes Company paid $16,500,000 cash and signed a $7,500,000 note payable (due in 3 months) to acquire in-process R&D from another company. They are planning to use the assets acquired for research and development in their GMB (Genetically Modified Broccoli) division. The assets can be used for other research and development projects as well. They plan to use the assets purchased for 10 years and believe they can sell them for $1,500,000 at the end of those 10 years. From July 1 through Dec. 31, 2018, Genes Co. spends $6,000,000 (palid in cash) on scientist salaries and broccoll plants to use in the purchased R&D project. Genes Co. also amortizes any capitalized assets on a straight-line basis. REQUIRED: Write the journal entry related to the acquisition that Genes Co. should record on July 1.2018.
Jordan manufacturing company (JMC) was started when it acquired $98000 by issuing common stock. During the first year of operations, the company incurred specifically identifiable products cost (material, labor, and overhead) amounting to $56,400. JMC also incurred $75,200 in engineering design and planning costs. There was a debate regarding how the design and planning costs should be classified. advocates of option 1 believe that the cost should be classified as general, selling, and administrative costs. advocates of option 2 believe it is more appropriate to classify the design and planning costs as product costs. during the year, JMC made 4700 units of product and sold 3900 units for $39.00 each. All transactions were cash transactions. Required 1)prepare a GAAP-based income statement and balance sheet under option 1. 2)prepare a GAAP-based income statement and balance sheet under option 2 3) Identify the option that results in financial statements that are more likely to leave a…
35.During 2021, King Co. incurred the following costs: Testing in search for process alternatives 720,000 Costs of testing prototype and design modifications 500,000 Modification of the formulation of a process 1,220,000 Research and development services performed by Queen Corp. for King 650,000 In King's 2021 statement of profit or loss, research and development expense should be 1,220,000 1,870,000 2,590,000 3,090,000