Wildhorse Company has a December 31 fiscal year end. Selected information follows for Wildhorse Company for two independentsituations as at December 31, 2024:1.2.Wildhorse purchased a patent from Windsor Inc. for $471,000 on January 1, 2021. The patent expires on January 1, 2029.Wildhorse has been amortizing it over its legal life. During 2024, Wildhorse determined that the patent's economic benefitswould not last longer than six years from the date of acquisition.Wildhorse has a trademark that had been purchased in 2017 for $285,000. During 2023, the company spent $50,000 on alawsuit that successfully defended the trademark. On December 31, 2024, it was assessed for impairment and therecoverable amount was determined to be $300,000. (b)For each of these assets, determine what, if anything, will be recorded on Wildhorse's 2024 income statement. Be specific aboutthe account name and the amount. (Round answers to 0 decimal places, eg. 5,276)Wildhorse CompanyIncome Statement (Partial)$

Wildhorse Company has a December 31 fiscal year end. Selected information follows for Wildhorse Company for two independent situations as at December 31, 2024: 1. Wildhorse purchased a patent from Windsor Inc. for $471,000 on January 1, 2021. The patent expires on January 1, 2029. Wildhorse has been amortizing it over its legal life. During 2024, Wildhorse determined that the patent's economic benefits would not last longer than six years from the date of acquisition, 2. Wildhorse has a trademark that had been purchased in 2017 for $285,000. During 2023, the company spent $50,000 on a lawsuit that successfully defended the trademark. On December 31, 2024, it was assessed for impairment and the recoverable amount was determined to be $300,000.

Wildhorse Company has a December 31 fiscal year end. Selected information follows for Wildhorse Company for two independent situations as at December 31, 2024: 1. Wildhorse purchased a patent from Windsor Inc. for $471,000 on January 1, 2021. The patent expires on January 1, 2029. Wildhorse has been amortizing it over its legal life. During 2024, Wildhorse determined that the patent's economic benefits would not last longer than six years from the date of acquisition, 2. Wildhorse has a trademark that had been purchased in 2017 for $285,000. During 2023, the company spent $50,000 on a lawsuit that successfully defended the trademark. On December 31, 2024, it was assessed for impairment and the recoverable amount was determined to be $300,000.

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

Culver Products Ltd. purchased a patent on January 1, 2020, for $840,000. At the time of the purchase, the patent had a remaining legal life of 15 years. In January, 2023, Culver spent $372,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. Culver's year-end was December 31. Prepare the entries on the books of Culver Ltd. to record (a) the purchase of the patent, (b) amortization for the first year (2020), (c) the defense of the patent, and (d) amortization for 2023. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. List all debit entries before credit entries.) No. Account Titles and Explanation (a) (b) (c) (d) Debit Credit
Presented below is selected information for Sandhill Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) (a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in 2017? Amount to be reported $ (b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on Carla Vista's books on January 1, 2016, was $238,00O. The franchise agreement had an estimated useful life of 10 years. Because Sandhill must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017? Amount to be amortized $ %24
Larkspur Limited purchased a patent for $86,400 on June 1, 2022. Larkspur has a calendar fiscal year end. Straight-line amortization is used for the patent, based on a five-year useful life, although the remaining legal life was 10 years. On May 31, 2024, Larkspur paid $28,800 in legal fees to successfully defend this patent in court and now wants to revise the estimate of the patent's remaining useful life to 8 years, which is the same as its remaining legal life. (a) (b) (c) (d) Record any necessary amortization prior to the change in the useful life of the patent. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts. List debit entry before credit entry)
Blue Incorotation has a patent that will expire at the end of 2025. They spent $100,000 to successfully prosecute an infringement suit on July 1, 2018. The carrying value of this patent before the litigation is $300,000. Write journal entries to record for these activities.
6. Joel Company
Sandhill Corporation purchased a patent for $147000 on September 1, 2024. It had a useful life of 10 years. On January 1, 2026, Sandhill spent $41000 to successfully defend the patent in a lawsuit. Sandhill feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense at the company's December 31, 2026 year-end if the straight-line method is used? O $25480. O $33680. O $31720. O $34660.
Sydney, Inc., a manufacturer of chocolate-coated mint candy acquired a patent on June 25, 2018, for 720,000. Management expects that the patent will be useful to the company for its remaining useful life of 10 years. On January 10, 2020, the company spent 120,000 in successfully defending the patent against a competitor. In 2021, management determines that the estimated remaining life of the patent should be reduced to only five years, including the current year. The company’s policy is to amortize the cost of Intangible assets using the straight-line method to the nearest month.What is the amortization expense for the year 2021? A. 72,000 B. 108,000 C. 129,000 D. 126,000
Greg Company was granted a patent on January 1, 2017 and appropriately capitalized P 450,000 of related costs. The entity was amortizing the patent over the useful life of 15 years, During 2020, the entity paid P 150,000 in legal costs in successfully defending an attempted infringement of the patent. After the legal action was completed, the entity sold the patent to the plaintiff for P 750,000. The policy is to take no amortization in the year of disposal. The entry to record the sale of patent in 2020:
Your answer is partially correct, costs of $171, 720 in successfully defending the patent in an infringement suit, manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31, 2025 Amortization Expense Patents Debit Credit Credit.
Danzer
prodigy Inc. has been carrying on a business since 2008. On November 1, 2023, Prodigy Inc. acquires a franchise for $31,000. The franchise has a limited life of 12 years. What is the maximum amount of CCA that Prodigy Inc. can claim for its taxation year that ends December 31, 2022? Assume that no designation will be made for immediate expensing. Round your answer to the nearest cent.\\n
On January 1, 2025, Mary Johnson signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $50,000. The amount of $9,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,200 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no future services are required of the franchisor once the franchise commences operations on April 1, 2025. Mary Johnson's credit rating indicates that she can borrow money at 8% for a loan of this type. Click here to view the factor table. (a) Your answer is correct. Prepare journal entries for Blossom for 2025-related revenue for this franchise arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal…