Wildhorse Equipment Company, organized in 2025, has these transactions related to intangible assets in that year: Jan. 2 Apr. 1 July 1 Sept. 1 Research and development costs $180,400. (a) Purchased a patent (5-year life) $316,800. Trademark purchased (indefinite life) $351,000. Acquired a 9-year franchise; expiration date July 1, 2034, $702,000. Prepare the necessary entries to record these intangibles. All costs incurred were for cash. (Credit account titles are automatical indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Account Titles and Explanation Date Debit Credit

Wildhorse Equipment Company, organized in 2025, has these transactions related to intangible assets in that year: Jan. 2 Apr. 1 July 1 Sept. 1 Research and development costs $180,400. (a) Purchased a patent (5-year life) $316,800. Trademark purchased (indefinite life) $351,000. Acquired a 9-year franchise; expiration date July 1, 2034, $702,000. Prepare the necessary entries to record these intangibles. All costs incurred were for cash. (Credit account titles are automatical indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Account Titles and Explanation Date Debit Credit

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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Janes Company provided the following information on intangible assets: A patent was purchased from the Lou Company for $700,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $350,000 when Lou sold it to Janes. During 2021, a franchise was purchased from the Rink Company for $500,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. Janes incurred research and development costs in 2021 as follows: Materials and supplies $ 140,000 Personnel 180,000 Indirect costs 60,000 Total $ 380,000 4. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. Required:1. Prepare the entries necessary for years 2019 through 2021 to reflect the above information.2.…
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Cullumber Limited organized late in 2022 and set up a single account for all intangible assets. The following summary shows the entries in 2023 (all debits) that have been recorded in Intangible Assets since then: Jan. 2: Purchased patent (8-year life) - $342,000 Mar. 31: Costs to search for new ways to apply patent that was purchased on Jan. 2 - $21,000 Apr. 1: Purchased goodwill (indefinite life) - $315,000 July 1: Purchased franchise with 10-year life; expiration date July 1, 2033 - $248,000 July 1: Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 - S 33,000 Aug. 1: Payment for copyright (5-year life) - $132,000 Aug. 1: Purchased trademark (3-year life) - $14,400 Aug. 1: Purchased customer lists (2-year life) S9, 600 Sept. 1: Research costs - $234,000 Total: $1,349,000
As the recently appointed auditor for Blossom Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Blossom mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE L ) ) Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Blossom (February to August) Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criteria) Start-up costs for first six months of operations Show Transcribed Text Account Titles and Explanation (To correct intangible asset account) Show Transcribed Text ASSETS (To correct intangible asset account) (To record amortization expense) (To record amortization expense) Debit Debit 1,056,500 47,000 50,400 158,000 216,000 328,000 Credit Prepare the…
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Ivanhoe Company, organized in 2022, has these transactions related to intangible assets in that year: Jan. Purchased a patent (5-year life) $305,500. Apr. 1. Goodwill purchased (indefinite life) $338,400. July Acquired a 9-year franchise; expiration date July 1, 2031, $676,800. Sept. 1 Research and development costs $173,900.
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What is the correct journal entry?