Amortization: Amortizationis the process of allocating the value of the intangible assets over its estimated useful life. Methods of amortization: Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues. Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset. To Calculate: The amortization of the patent for the year 2016 and 2017.

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Answer 1

Question

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

3.

To determine

To Calculate: The amortization for the year 2018.

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

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Acorn Construction (calendar-year-end C corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has record income and would like to maximize its cost recovery deduction for the current year. (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Round your answer to the nearest whole dollar amount. Acorn provided you with the following information: Asset Placed in Service Basis New equipment and tools August 20 $ 3,800,000 Used light-duty trucks October 17 2,000,000 Used machinery November 6 1,525,000 Total $ 7,325,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction two years ago. a. What is Acorn's maximum cost recovery deduction in the current year?

Answer 2

Question

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

3.

To determine

To Calculate: The amortization for the year 2018.

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Expert Solution & Answer

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Answer 3

Question

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

3.

To determine

To Calculate: The amortization for the year 2018.

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

3.

To determine

To Calculate: The amortization for the year 2018.

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

3.

To determine

To Calculate: The amortization for the year 2018.

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Answer 6

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

Answer 7

Chapter 11, Problem 11.36E

1.

To determine

Amortization:

Amortizationis the process of allocating the value of the intangible assets over its estimated useful life.

Methods of amortization:

Percentage-of-revenue method –– Amortization is determined with the ratio of the current revenues to the current and anticipated revenues.

Straight-line method–– Amortization is determined with the straight line percentage over the estimated life of the asset.

To Calculate: The amortization of the patent for the year 2016 and 2017.

Answer 8

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

Answer 9

2.

To determine

To Prepare: The journal entry to record the 2018 litigation costs.

Answer 10

3.

To determine

To Calculate: The amortization for the year 2018.

Answer 11

3.

To determine

To Calculate: The amortization for the year 2018.

Answer 12

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Answer 13

4.

To determine

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

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Solution Summary: The author explains how to calculate the amortization of the patent for the year 2016 and 2017 using the straight-line method.

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To Prepare: The journal entry to record the 2018 litigation costs.

To Calculate: The amortization for the year 2018.

To Prepare: The journal entry to record the 2018 litigation costs as per IFRS.

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