Financial Accounting (5th Edition) (What's New in Accounting)
5th Edition
ISBN: 9780134727790
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 8, Problem 27AE
Part 1. (a)
To determine
Write the journal entries to record the purchase of the patent.
b.
To determine
Write the journal entries to record the amortization for Year 1.
Part 2.
To determine
Write the
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(Learning Objectives 5, 6: Record intangibles, amortization, and impairment)1. Milton Printers incurred external costs of $700,000 for a patent for a new laser printer.Although the patent gives legal protection for 20 years, it was expected to provide Miltonwith a competitive advantage for only eight years due to expected technological advancesin the industry. Milton uses the straight-line method of amortization.2. After using the patent for four years, Milton learned at an industry trade show thatAnderson Printers has patented a more efficient printer and will begin selling the newprinter next quarter. Because of this new information, Milton determined that the expectedfuture cash flows from its patent were now only $270,000. The fair value of Milton’spatent on the open market was now zero.Requirements1. Write the journal entries to record (a) the purchase of the patent and (b) amortization for year 1.2. Once Milton learned of the competing printer and adjusted the expected future…
Maylen Printers (MP) manufactures printers. Assume that MP recently paid $800,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is
expected to provide a competitive advantage for only ten years.
Read the fequirements
Requirement 1. Assuming the straight-line method of amortization, make journal entries to record (a) the purchase of the patent and (b) amortization for the first full year. (Record
debits first, then credits. Select the explanation on the last line of the journal entry table.)
(a) Record the purchase of the patent.
Date
Accounts and Explanation
Debit
Credit
(O Time
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O GB V 19:10
DELL
(Learning Objective 3: Change a plant asset’s useful life) Chester Consultantspurchased a building for $430,000 and depreciated it on a straight-line basis over 40 years. Theestimated residual value was $70,000. After using the building for 20 years, Chester realizedthat the building would remain useful only 14 more years. Starting with the 21st year, Chesterbegan depreciating the building over the newly revised total life of 34 years and decreasedthe estimated residual value to $12,980. Record depreciation expense on the building foryears 20 and 21.
Chapter 8 Solutions
Financial Accounting (5th Edition) (What's New in Accounting)
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - What is depreciation, and why is it used in...Ch. 8 - Prob. 5DQCh. 8 - Which depreciation method would be moot...Ch. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 1SCCh. 8 - Prob. 2SCCh. 8 - How should a capital expenditure for a long-term...Ch. 8 - Which depreciation method usually produces the...Ch. 8 - Prob. 5SCCh. 8 - Prob. 6SCCh. 8 - Prob. 7SCCh. 8 - Prob. 8SCCh. 8 - Prob. 9SCCh. 8 - Prob. 10SCCh. 8 - Prob. 11SCCh. 8 - Prob. 12SCCh. 8 - Prob. 1SECh. 8 - Long-term asset terms (Learning Objective 1) 5-10...Ch. 8 - Prob. 3SECh. 8 - Lump-sum purchase (Learning Objective 2) 5-10 min....Ch. 8 - Errors in accounting for long-term assets...Ch. 8 - Concept of depreciation (Learning Objective 3)...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Depreciation methods (Learning Objective 3) 10-15...Ch. 8 - Prob. 9SECh. 8 - Prob. 10SECh. 8 - Prob. 11SECh. 8 - Prob. 12SECh. 8 - Prob. 13SECh. 8 - Prob. 14SECh. 8 - Prob. 15SECh. 8 - Other long term assets (Learning Objective 8) 5-10...Ch. 8 - Prob. 17SECh. 8 - Prob. 18AECh. 8 - Prob. 19AECh. 8 - Prob. 20AECh. 8 - Prob. 21AECh. 8 - Depreciation methods (Learning Objective 3) 15-20...Ch. 8 - Prob. 23AECh. 8 - Prob. 24AECh. 8 - Prob. 25AECh. 8 - Prob. 26AECh. 8 - Prob. 27AECh. 8 - Prob. 28AECh. 8 - Prob. 29AECh. 8 - Prob. 30AECh. 8 - Prob. 31AECh. 8 - Prob. 32BECh. 8 - Prob. 33BECh. 8 - Prob. 34BECh. 8 - Prob. 35BECh. 8 - Prob. 36BECh. 8 - Prob. 37BECh. 8 - Prob. 38BECh. 8 - Prob. 39BECh. 8 - Prob. 40BECh. 8 - Prob. 41BECh. 8 - Prob. 42BECh. 8 - Prob. 43BECh. 8 - Prob. 44BECh. 8 - Prob. 45BECh. 8 - Long-term asset costs and partial-year...Ch. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 48APCh. 8 - Prob. 49APCh. 8 - Prob. 50APCh. 8 - Prob. 51APCh. 8 - Prob. 52APCh. 8 - Prob. 53BPCh. 8 - Journalizing long-term asset transactions...Ch. 8 - Prob. 55BPCh. 8 - Prob. 56BPCh. 8 - Prob. 57BPCh. 8 - Prob. 58BPCh. 8 - Prob. 59BPCh. 8 - Prob. 1CECh. 8 - Prob. 1CPCh. 8 - Continuing Financial Statement Analysis Problem...Ch. 8 - Prob. 1EIACh. 8 - Prob. 2EIACh. 8 - Financial Analysis Purpose: To help familiarize...Ch. 8 - Prob. 1IACh. 8 - Prob. 1SBACh. 8 - Written Communication A client of yours notified...
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