using information below how can I prepere Bringle company income statement effects for year end December 31, 2019? We have the following information: A patent was purchased from Lou Company for $1,845,000 on January 1, 2018. Bringle estimated the remaining useful life of the patent to be 15 years. The patent was carried in Lou's accounting records at a net book value of $1,635,000 when Lou sold it to Bringle. During 2019, a franchise was purchased from Rink Company for $470,000. In addition, 6% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,000,000. Bringle estimates the useful life of the franchise to be 5 years and takes a full year's amortization in the year of purchase On January 1, 2019, Bringle estimates, based on new events, that the remaining life of the patent purchased on January 1, 2018, is only 10 years from January 1, 2019 Step 2 Schedule showing the intangibles section of Bringle's balance sheet at December 31, 2019 Working Notes Patent Net Value Amortization for 2018 Cost of Patent - Amortization for 2018 = $1,845,000 - ($1,845,000 /15) = $1,845,000 - $123,000 = $1,772,000 Amortization for 2019 Patent Value as on 1st Jan 2019 - Amortization for 2019 = $1,722,000 - ($1,722,000 /10) [remaining life changed to 10 years as mentioned in the question] = $1,722,00 - $172,200 = $1,549,800 Net Patent Value = $1,549,800 Net Franchise from Rink Company = Cost of Franchise - Amortization = $470,000 - ($470,000 / 5) = $470,000 - $94,000 = $376,000

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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using information below how can I prepere Bringle company income statement effects for year end December 31, 2019?

We have the following information:

A patent was purchased from Lou Company for $1,845,000 on January 1, 2018. Bringle estimated the remaining useful life of the patent to be 15 years. The patent was carried in Lou's accounting records at a net book value of $1,635,000 when Lou sold it to Bringle.
During 2019, a franchise was purchased from Rink Company for $470,000. In addition, 6% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,000,000. Bringle estimates the useful life of the franchise to be 5 years and takes a full year's amortization in the year of purchase
On January 1, 2019, Bringle estimates, based on new events, that the remaining life of the patent purchased on January 1, 2018, is only 10 years from January 1, 2019

Step 2

Schedule showing the intangibles section of Bringle's balance sheet at December 31, 2019

Working Notes

Patent Net Value

Amortization for 2018

Cost of Patent - Amortization for 2018

= $1,845,000 - ($1,845,000 /15)

= $1,845,000 - $123,000

= $1,772,000

Amortization for 2019

Patent Value as on 1st Jan 2019 - Amortization for 2019

= $1,722,000 - ($1,722,000 /10) [remaining life changed to 10 years as mentioned in the question]

= $1,722,00 - $172,200 = $1,549,800

Net Patent Value = $1,549,800

Net Franchise from Rink Company

= Cost of Franchise - Amortization

= $470,000 - ($470,000 / 5)

= $470,000 - $94,000

= $376,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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