Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd
2nd Edition
ISBN: 9781337912259
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 2P
To determine
Prepare necessary
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
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…
As the recently appointed auditor for Sandhill Corporation, you have been asked to examine selected accounts before the six-month
financial statements of June 30, 2023, are prepared. The controller for Sandhill mentions that only one account is kept for intangible
assets. The entries in Intangible Assets since January 1, 2023, are as follows:
INTANGIBLE ASSETS
4
5
11
30
30
Research costs
Legal costs to obtain patent
Payment of seven months' rent on property leased by Sandhill (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
Account Titles and Explanation
Debit
Debit
1,043,600
57,000
50,400
159,000
222,000
314,000
Credit
Credit
309,800
Balance
1,043,600
1,100,600
1,151,000
841,200
1,000,200
Prepare the journal entry or entries needed to correct this account. Allocate rent between the prepaid and expense accounts…
As the recently appointed auditor for Cheyenne Corporation, you have been asked to examine selected accounts before the 6-month
financial statements of June 30, 2020, are prepared. The controller for Cheyenne Corporation mentions that only one account is kept
for intangible assets. The account is shown below.
Jan. 4
Jan. 5
Jan. 31
Feb. 11
March 31
April 30
June 30
Intangible Assets
Research and development costs
Legal costs to obtain patent
Payment of 7 months' rent on property
leased by Cheyenne
Premium on common stock
Unamortized bond discount on bonds
due March 31, 2040
Promotional expenses related to
start-up of business
Operating losses for first 6 months
Debit
934,000
72,960
86,800
93,600
228,800
259,000
Credit
234,000
Balance
934,000
1,006,960
1,093,760
859,760
953,360
1,182,160
1,441,160
Prepare the entries necessary to correct this account. Assume that the patent has a useful life of 10 years. (Credit account titles are
automatically indented when amount is entered. Do not…
Chapter 12 Solutions
Cengagenowv2, 1 Term Printed Access Card For Wahlen/jones/pagach’s Intermediate Accounting: Reporting And Analysis, 2017 Update, 2nd
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
Knowledge Booster
Similar questions
- Whispering Company owns equipment that cost $100,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $10,000 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Whispering Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) (b) (c) (d) (e) (f) (a) Sold for $59,000 on January 1, 2022. Sold for $59,000 on April 1, 2022. SR. Account Titles and Explanation (b) Sold for $21,000 on January 1, 2022. Sold for $21,000 on September 1, 2022. Repeat (a), assuming Whispering uses double-declining…arrow_forwardWhat is the correct journal entry?arrow_forwardCould you please calculate also: Prepare the December 31 entry for Pronghorn Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $4,920.arrow_forward
- Marigold Company owns equipment that cost $79,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $7,900 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Marigold Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (a) (b) (c) (d) (e) (A) SR. Account Titles and Explanation (a) (b) Sold for $45,000 on January 1, 2022. Sold for $45,000 on April 1, 2022. Sold for $17,000 on January 1, 2022. Sold for $17,000 on September 1, 2022 Repeat (a), assuming Marigold uses double-declining balance…arrow_forwardRakko, Inc. acquired a patent on January 1 for $70,000 cash. The patent was estimated to have a useful life of 14 years with no residual value. Required: Part a. Prepare the journal entry to record the acquisition of the patent on January 1. Part b. Prepare the journal entry to record the annual amortization as of Dec 31.arrow_forwardThe Horstmeyer Corporation commenced operations early in 2021. A number of expenditures were made during 2021 that were debited to one account called intangible asset. A recap of the $252,500 balance in this account at the end of 2021 is as follows: Date Transaction Amount State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project $ 9,500 7,500 40,000 60, 000 7,500 32,000 60, 000 36,000 February 3 March 1 March 15 April 30 June 15 September 30 Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs October 13 Various Total $252,500 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated…arrow_forward
- During the year end audit of Cressman Corporation's financial statement for 2019, you discover the following items: 1. Cressman capitalized $75,000 to the patent account at the beginning of 2018 for the cost of a patent. This amount included $50,000 of R&D costs. The patent was amortized over a 20-year life in 2018 and 2019. 2. At the beginning of 2018, Cressman paid its lawyers $8,000 to successfully defend a patent infringement suit regarding the patent in item 1. Cressman debited this cost to legal fees expense. 3. At the beginning of 2018, Cressman purchased a patent for $30,000 from the Baylor Company to prevent potential competition. It recorded the cost in the Patent account and amortized this cost over the remaining legal life of the patent obtained in item 1 (19 years). However, Cresssman agreed to a suggestion by the auditors that the life of the original patent obtained in Item 1 was protected for only 7 more years as of the beginning of 2020. Required. Prepare adjusting and…arrow_forwardWildhorse Company owns equipment that cost $121,000 when purchased on January 1, 2019. It has been depreciated using the straight-line method based on an estimated salvage value of $12,100 and an estimated useful life of 5 years. Depreciation expense adjustments are recognized annually. Instructions: Prepare Wildhorse Company's journal entries to record the sale of the equipment in these four independent situations. Update depreciation on assets disposed of at time of sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) (a) Sold for $73,000 on January 1, 2022. (b) Sold for $73,000 on April 1, 2022. (c) Sold for $25,500 on January 1, 2022. (d) Sold for $25,500 on September 1, 2022. (e) Repeat (a), assuming Wildhorse uses double-declining balance depreciation. (f) Repeat (c), assuming Wildhorse…arrow_forwardThe Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $207,500 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total View transaction list 1 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. Note: If no entry is required…arrow_forward
- The Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $223,000 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs < 1 Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total View transaction list Journal entry worksheet Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions.…arrow_forwardThe Horstmeyer Corporation commenced operations early in 2024. A number of expenditures were made during 2024 that were debited to one account called intangible asset. A recap of the $246,000 balance in this account at the end of 2024 is as follows: Date February 3 March 1 March 15 April 30 June 15 September 30 October 13 Various Transaction State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs Total Amount $ 9,000 7,000 39,000 59,000 7,000 31,000 59,000 35,000 $ 246,000 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by…arrow_forwardDuring the current year, Black Corporation incurred the following expenditures which should be recorded either as operating expenses or as intangible assets and name the asset and explain why you categorize particular asset. a. Expenditures were made for the training of new employees. The average employee remains with the company for five years, but is trained for a new position every two years. b. Black purchased a controlling interest in a vinyl flooring company. The expenditure resulted in the recording of a significant amount of goodwill. Black expects to earn above-average returns on this investment indefinitely. c. Black incurred large amounts of research and development costs in developing a dirt- resistant carpet fiber. The company expects that the fiber will be patented and that sales of the resulting products will contribute to revenue for at least 25 years. The legal life of the patent, however, will be only 20 years. d. Black made an expenditure to acquire the patent on a…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College