Van Frank Telecommunications has a patent on a cellular transmission process. The company hasamortized the patent on a straight-line basis since 2020, when it was acquired at a cost of $27.0 million atthe beginning of that year. Due to rapid technological advances in the industry, management decided thatthe patent would benefit the company over a total of six years rather than the nine-year life being used toamortize its cost. The decision was made at the beginning of 2024.Required:Prepare the year-end journal entry for patent amortization in 2024. No amortization was recorded duringthe year.Note: If no entry is required for a transaction/event, select "No journal entry required" in the firstaccount field. Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should beentered as 5.5).1No> Answer is complete but not entirely correct.EventGeneral Journal1Amortization expensePatentDebitCredit7,500,000.007,500,000.00

Detailed explanation:Amortization per year = cost / useful life = 27.0 million / 9 years = 3.0…

Answered: Van Frank Telecommunications has a…

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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During 2024, YellowCard constructed a small manufacturing facility specifically to manufacture one particular accessory. YellowCard paid the construction contractor $5,000,000 cash (which was the total contract price) and placed the facility into service on January 1, 2025. Because of technological change, YellowCard anticipates that the manufacturing facility will be useful for no more than 10 years. The local government where the facility is located required that, at the end of the 10-year period, YellowCard remediate the facility so that it can be used as a community center. YellowCard estimates the cost of remediation will be $500,000. YellowCard uses straight-line depreciation with $0 salvage value for its plant asset and a 10% discount rate for asset retirement obligations. Instructions Prepare the journal entries to record the January 1, 2025, transactionsPrepare adjusting entries to record depreciation and interest expense on December 31, 2025.
Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2024, for $3.5 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $260,000 at the end of five years. Assuming the straight-line method is used, what is Granite's patent amortization for 2024? Multiple Choice $324,000 $350,000 $648,000 $700,000
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During 2024, Sheffield constructed a small manufacturing facility specifically to manufacture one particular accessory. Sheffield paid the construction contractor $5,053,000 cash (which was the total contract price) and placed the facility into service on January 1, 2025. Because of technological change, Sheffield anticipates that the manufacturing facility will be useful for no more than 10 years. The local government where the facility is located required that, at the end of the 10-year period, Sheffield remediate the facility so that it can be used as a community center. Sheffield estimates the cost of remediation will be $542,400. Sheffield uses straight-line depreciation with $0 salvage value for its plant asset and a 9% discount rate for asset retirement obligations. (a) Prepare the journal entries to record the January 1, 2025, transactions. Use the Plant Assets account for the tanker depot. (Credit account titles are automatically indented when the amount is entered. Do not…
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Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the patent on a straight-line basis since 2012, when it was acquired at a cost of $9 million at the beginning of that year. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the end of 2016 (before adjusting and closing entries). Required: Prepare the appropriate adjusting entry for patent amortization in 2016 to reflect the revised estimate.
Hello Corporation purchased a patent for $90,000 on September 1, 2020. It had a useful life of 10 years. On January 1, 2022, Hello spent $22,000 to successfully defend the patent in a lawsuit. Hello feels that as of that date, the remaining useful life is 5 years. Calculate the amount that should be reported for patent amortization expense for 2022.
Alcide Mining Company purchased land on February 1, 2020, at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $90,000. It believes it will be able to sell the property afterwards for $100,000. It incurred developmental costs of $200,000 before it was able to do any mining. In 2020, resources removed totaled 30,000 tons. The company sold 22,000 tons. Instructions Compute the following information for 2020. a. Per unit material cost. b. Total material cost of December 31, 2020, inventory. c. Total material cost in cost of goods sold at December 31, 2020.
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