EBK INTERMEDIATE ACCOUNTING: REPORTING
2nd Edition
ISBN: 9781337268998
Author: PAGACH
Publisher: YUZU
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Chapter 12, Problem 20E
To determine
Prepare necessary
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Jolis Company has provided information on the following items:
1.
A patent was purchased from Totley Company for $600,000 on January 1, 2018. At that time, Jolis estimated the remaining useful life to be 10 years. The patent was carried on Totley’s books at $20,000 when it sold the patent.
2.
On March 2, 2019, a franchise was purchased from Unal Company for $240,000. In addition, 8% of the revenue from the franchise must be paid to Unal. Revenue earned during 2019 was $650,000. Jolis believes that the life of the franchise is indefinite and that the franchise is not impaired at the end of 2019.
3.
R&D costs were incurred as follows: (a) materials and equipment, $60,000; (b) personnel, $80,000; and (c) indirect costs, $40,000. The costs were incurred to develop a product that will go on sale in 2020 and will have an expected life of 5 years.
4.
A trade name had been purchased for a sugar substitute at the beginning of 2015 for $81,000. In January 2019, it was suspected…
A patent was acquired by Renfro Corporation on January 1,
2014, at a cost of $90,000. The useful life of the patent was
estimated to be 10 years. At the beginning of 2017, Renfro spent
$15,000 in successfully defending an infringement of the patent.
At the beginning of 2018, Renfro purchased a patent for $22,000
that was expected to prolong the life of its original patent for 5
additional years.
Instructions
Calculate the following amounts for Renfro Corporation.
(а)
Amortization expense for 2014.
The balance in the Patent account at the beginning of
(b)
2017, immediately after the infringement suit.
Amortization expense for 2017.
(c)
The balance in the Patent account at the beginning of
(d)
2018, after purchase of the additional patent.
Amortization expense for 2018.
(e)
Aramex Company purchased a patent from Datco Company for $220,000 on July 1, 2012. Expenditures of $68,000 for successful litigation in defense of the patent were paid on July 1, 2015. Aramex Company estimates that the useful life of the patent will be 20 years from the date of acquisition.
Instructions : Prepare a computation of the carrying value of the patent at December 31, 2015.
Chapter 12 Solutions
EBK INTERMEDIATE ACCOUNTING: REPORTING
Ch. 12 - Prob. 1GICh. 12 - Prob. 2GICh. 12 - Prob. 3GICh. 12 - Prob. 4GICh. 12 - Prob. 5GICh. 12 - Prob. 6GICh. 12 - Prob. 7GICh. 12 - What activities are included in RD? Which are...Ch. 12 - What elements of RD activities does a company...Ch. 12 - How does a company record a patent worth 100,000...
Ch. 12 - Prob. 11GICh. 12 - Prob. 12GICh. 12 - Over how many years are patents amortized?...Ch. 12 - Prob. 14GICh. 12 - Prob. 15GICh. 12 - Prob. 16GICh. 12 - Prob. 17GICh. 12 - Prob. 18GICh. 12 - Prob. 19GICh. 12 - Prob. 20GICh. 12 - What is the proper time or time period over which...Ch. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Which of the following assets typically are...Ch. 12 - Prob. 5MCCh. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - Prob. 9MCCh. 12 - Prob. 10MCCh. 12 - Prob. 1RECh. 12 - Match the following items with correct accounting...Ch. 12 - Notting Hill Company incurred the following costs...Ch. 12 - Hook Corp. incurred the following start-up costs,...Ch. 12 - Prob. 5RECh. 12 - Prob. 6RECh. 12 - Prob. 7RECh. 12 - Prob. 8RECh. 12 - Prob. 9RECh. 12 - Prob. 10RECh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - KLK Clothing Company manufactures professional...Ch. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - Prob. 18ECh. 12 - Prob. 19ECh. 12 - Prob. 20ECh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11PCh. 12 - Prob. 1CCh. 12 - Prob. 2CCh. 12 - Prob. 3CCh. 12 - Prob. 4CCh. 12 - Prob. 5CCh. 12 - Prob. 6CCh. 12 - NBC paid 401 million for the rights to televise...Ch. 12 - Prob. 8C
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