Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Question
Chapter 7, Problem 7.6AP
1.
To determine
To record: The amortization expenses for the intangible assets at December 31, 2018.
2.
To determine
To prepare: The intangible asset section of the December 31, 2018
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Problem 7-6A (Algo) Record amortization and prepare the intangible assets section (LO7-5)
The following information relates to the intangible assets of University Testing Services (UTS):
a. On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,306,000 in cash. The fair value of the net
identifiable assets of Heinrich was $3,000,000.
b. Included in the assets purchased from Heinrich was a patent valued at $92,400. The original legal life of the patent was 20
years; there are 12 years remaining, but UTS believes the patent will be useful for only eight more years.
c. UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $362,000. The contractual life of the franchise is 10
years.
Required:
1. Record amortization expense for the intangible assets at December 31, 2024.
2. Prepare the intangible asset section of the December 31, 2024, balance sheet.
Complete this question by entering your answers in the tabs below.
Required: Required 2…
!
Required information
[The following information applies to the questions displayed below.]
The following information relates to the intangible assets of Lettuce Express:
a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Ic., for $1,590,000 in cash. The
fair value of the identifiable net assets of Farmers Produce was $1,431,000.
b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at
$54,000. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce
Express estimates the patent will be useful for only 10 more years.
c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $187,600. The contractual
life of the franchise is seven years.
2. Prepare the intangible asset section of the December 31, 2021, balance sheet.
LETTUCE EXPRESS
Balance Sheet
December 31, 2021
(Intangible Assets Section)
Intangible Assets…
The following information relates to the intangible assets of University Testing Services (UTS):a. On January 1, 2021, UTS completed the purchase of Heinrich Corporation for $3,510,000 in cash. The fair value of the net identifiable assets of Heinrich was $3,200,000.b. Included in the assets purchased from Heinrich was a patent valued at $82,250. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for only seven more years.c. UTS acquired a franchise on July 1, 2021, by paying an initial franchise fee of $333,000. The contractual life of the franchise is 9 years.Required:1. Record amortization expense for the intangible assets at December 31, 2021.2. Prepare the intangible asset section of the December 31, 2021, balance sheet.
Chapter 7 Solutions
Financial Accounting
Ch. 7 - Prob. 1RQCh. 7 - What are the two major categories of long-term...Ch. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Equipment includes machinery used in manufacturing...Ch. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQ
Ch. 7 - Prob. 11RQCh. 7 - How do we decide whether to capitalize (record as...Ch. 7 - Explain the usual accounting treatment for repairs...Ch. 7 - Prob. 14RQCh. 7 - How is the dictionary definition different from...Ch. 7 - What factors must we estimate in allocating the...Ch. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Prob. 19RQCh. 7 - Assume that Little King Sandwiches uses...Ch. 7 - Assume Little King Sandwiches depreciates a...Ch. 7 - Prob. 22RQCh. 7 - Prob. 23RQCh. 7 - What is book value? How do we compute the gain or...Ch. 7 - Prob. 25RQCh. 7 - Prob. 26RQCh. 7 - Prob. 27RQCh. 7 - Prob. 28RQCh. 7 - Determine the initial cost of land (LO71) Fresh...Ch. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Compute research and development expense (LO72)...Ch. 7 - Prob. 7.5BECh. 7 - Explain the accounting definition of depreciation...Ch. 7 - Prob. 7.7BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Account for the sale of long-term assets (LO76)...Ch. 7 - Account for the exchange of long-term assets...Ch. 7 - Account for the exchange of long-term assets...Ch. 7 - Prob. 7.13BECh. 7 - Determine the impairment loss (LO78) Vegetarian...Ch. 7 - Prob. 7.15BECh. 7 - McCoys Fish House purchases a tract of land and an...Ch. 7 - Orion Flour Mills purchased a new machine and made...Ch. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Prob. 7.8ECh. 7 - Prob. 7.9ECh. 7 - Determine depreciation for the first year under...Ch. 7 - Deformine depreciation under three methods (LO74)...Ch. 7 - Determine straight-line depreciation for partial...Ch. 7 - Determine straight-line depreciation for partial...Ch. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Record the sole of equipment (L076) Abbott...Ch. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Complete the accounting cycle using long-term...Ch. 7 - The Italian Bread Company purchased land as a...Ch. 7 - Prob. 7.2APCh. 7 - Prob. 7.3APCh. 7 - Prob. 7.4APCh. 7 - Determine depreciation under three methods (LO74)...Ch. 7 - Prob. 7.6APCh. 7 - Compute depreciation, amortization, and book value...Ch. 7 - Prob. 7.8APCh. 7 - Calculate and interpret ratios (LO77) Sub Station...Ch. 7 - Calculate and interpret ratios (LO77) University...Ch. 7 - Prob. 7.1BPCh. 7 - Determine the acquisition cost of equipment (LO71)...Ch. 7 - Prob. 7.3BPCh. 7 - Prob. 7.4BPCh. 7 - Determine depreciation under three methods (LO74)...Ch. 7 - Prob. 7.6BPCh. 7 - Prob. 7.7BPCh. 7 - Record the disposal of equipment (LO76) Flip Side...Ch. 7 - Calculate and Interpret ratios (LO77) Papas Pizza...Ch. 7 - Calculate and interpret ratios (LO77) Barry...Ch. 7 - Prob. 7.1APCPCh. 7 - Prob. 7.2APFACh. 7 - Prob. 7.3APFACh. 7 - Prob. 7.4APCACh. 7 - Prob. 7.5APECh. 7 - Written Communication At a recent luncheon, you...Ch. 7 - Earnings Management Edward L. Vincent is CFO of...
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Similar questions
- The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $2,796,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,500,000. Included in the assets purchased from Heinrich was a patent valued at $103,950. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for only nine more years. UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $273,600. The contractual life of the franchise is 8 years. Required Record the year-end adjusting entry for amortization expense, if any, for the intangible assets at December 31, 2024. Prepare the intangible asset section of the December 31, 2024, balance sheet.arrow_forwardThe following information relates to the intangible assets of Lettuce Express:a. On January 1, 2021, Lettuce Express completed the purchase of Farmers Produce, Inc., for $1,600,000 in cash. The fair value of the identifiable net assets of Farmers Produce was $1,440,000.b. Included in the assets purchased from Farmers Produce was a patent for a method of processing lettuce valued at $49,500. The original legal life of the patent was 20 years. There are still 17 years left on the patent, but Lettuce Express estimates the patent will be useful for only 9 more years.c. Lettuce Express acquired a franchise on July 1, 2021, by paying an initial franchise fee of $216,000. The contractual life of the franchise is eight years.Required:1. Record amortization expense for the intangible assets at December 31, 2021.2. Prepare the intangible asset section of the December 31, 2021, balance sheet.arrow_forwardEverlasting Corporation provided the following information regarding its Research JPB-04 included in the company’s Intangible account as of December 31, 2022: Research JPB-04 is for a research project which consists of the following charges: Salaries of research staff, P18,000 Patent acquired solely for the use in the project, P12,000 Special equipment acquired and useful for various similar research activities, P10,000 Patent acquired for use in several research projects including JPB-04, P16,000 The equipment and patents have been found to be useful for approximately four years. Both the patents and equipment were acquired at the beginning of 2022. How much should be recognized as research and development expense for the year 2022?arrow_forward
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