1. How much of the transactions below should be charged against CELESTINE's Net Income for the year ended 2020?2. Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below. CELESTINE CORPORATION was organized on 2019. Its accounting records include only oneaccount for all intangible assets. The following is a summary of the debit entries that have beenrecorded and posted during 2019 and 2020:INTANGIBLE ASSETSJuly 1, 2019 8-year franchise; expires June 30, 2027126,000Advance payment on leasehold (term of lease is 2 years)December 31, 2019 Net loss 2019 including incorporation fee, P3,000 and relatedlegal fees of organizing. P15, 000 (all fees incurred in 2019)Acquired patent A (25-year life determined by company)October 1, 201984,00048,000January 2, 2020222,000March 1, 2020Cost of developing secret formulaGoodwill purchasedMay 1, 2020 Goodwill arising from business combinationMay 1, 2020 Acquired copyright from the business combination with book225,000April 1, 2020835,200850,000200,000value (amortized for 20 years and expiring in October 2020)June 1, 2020 Registered Patent B at the patenting officeJuly 1, 2020 Legal fee for successful defense of patent purchased aboveSeptember 1, 2020 Legal fees for merger and acquisition documents related to the150,00037,950business combinationResearch and development costsNovember 30, 2020 Purchased Patent C with useful life of 5 years50,000480,000October 1, 2020120,000

Non Cash items- A non-cash item has two dissimilar meanings. In banking, the word is used to express…

1. How much of the transactions below should be charged against CELESTINE's Net Income for the year ended 2020? 2. Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below.

1. How much of the transactions below should be charged against CELESTINE's Net Income for the year ended 2020? 2. Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 11P

See similar textbooks

Related questions

Q: Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For th...

A: Accumulated Depreciation Debit Credit Particulars Amount (In $) Particulars Amount (In $) ...

Q: March 120,000 120,000 70,000 100,000 Аprl 120,000 140,000 90,000 120,000 May 200,000 140,000 100,000...

A: Contribution of the Project Sales. xxxxx-Variable cost. ...

Q: vendor showed that the company has only five suppliers which account for 90% of the total accounts p...

A: Materiality is important in audit to obtain reasonable assurance. If during audit auditor realize th...

Q: Please tell me more about the relationship of different Financial Statements.

A: Financial statements are those statements which are statements which are reported at the end of acco...

Q: Situs of taxation is the place of taxation. Which of the statement is not true about situs?

A: Answer: Situs of taxation is place of taxation. a. Situs of persons is the residence of the taxpay...

Q: Y Corporation has daily collections of 130,000 from a selected foreign customer group. The bank offe...

A: Solution Given Amount 130000 Current clearing time 8 days Reduced clearing time 3 ...

Q: Assume your organization has the following inventory changes during the year: Beginning inventory...

Q: refer to the orginal data. Compute the company's margin of safety in both dollar and percentage term...

A: Answer 4) Calculation of Margin of Safety in Dollars Margin of Safety in Dollars = Current Sales – B...

Q: 1-year advanced rent of P30,000 to apply for 2020 was received from a sublease contract. P40,000 tot...

A: Net Sales = 20,00,000 Purchases = 12,00,000 Opening Inventory = 2,00,000 Closing Inventory = 3,00,00...

Q: Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense...

A: Lets understand the basics. For calculating units for the target profit, we need to use below formul...

Q: Weighted-average cost per unit

A: Inventory: Inventory means to stock it may be raw materials, work-in-process or finished goods Goods...

Q: The following information for Tuell Company is available: Case 1 2 4 5 Cost $5.00 $5.00 $5.00 $5.00 ...

A: The LIFO approach used the lower of the cost or market value within US GAAP, while the other techniq...

Q: Bentilador Mo Co. gathered the following information In reconciling the cash balance on December 31,...

A: A reconciliation statement must account for all fees assessed by a bank on an account. The balance ...

Q: 3. In the audit of loans payable, which of the following audit procedure would be most likely perfor...

A: Answer: Audit procedures are performed to test the assertions for the financials. The assertions are...

Q: On October 1, Goodwell Company rented warehouse space to a tenant fo $1,600 per month and received $...

A: Unearned revenue is one of the liability of the business, which means revenue received in advance bu...

Q: Exercise 5-10 (Static) Multiproduct Break-Even Analysis [LO5-9] Lucido Products markets two computer...

A: Solution:- 1)Calculation of overall contribution margin ratio as follows under:- Overall contributio...

Q: A company reports the following: Net income $275,000 Preferred dividends 11,000 Average stockholders...

A: a) Return on stockholders equity = Net income / Average stockholders equity = 275,000/2,200,000 = 12...

Q: 4,500 per year for 5 years. Mutually Exclusive project LL costs 37,500, and its expected cash flows ...

A: Net present value = (Annual cash inflows x Present value of annuity factor at 14% for 5 years) - Ini...

Q: On January 1, 2021 Asset of Matalino Company was P2,500,000 and its liabilities was P800,000. By Dec...

A: As per given information On January 1, 2021 Assets = P2,500,000 Liabilities = P800,000 On December ...

Q: KC Company's Dec. 31, 2021 cash balance is P8,350,000 before possible adjustments for the following:...

A: Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a c...

Q: YES Partnership started operations on January 1, 201 balances : with the following capital Yves P88,...

A: Note: As per our guidelines only the first three subparts will be solved A. Profit/(Loss) to be sh...

Q: The following details are found in the incomplete bank reconciliation statement of Phillip Company f...

A: Bank reconciliation statement is prepared to reconcile cash balance as per cashbook and bank balance...

Q: I need the double declining balance for 5 years based on the following statement, I have the first t...

A: Thw Depreciation expense is charged on fixed assets as reduced value of the fixed usage and the pass...

Q: BC Corporation has a lower and an upper limit for its savings account at 40,000 and 70,000 respectiv...

A: Solution Concept Miller-Orr Model let us analyze the details of the model ...

Q: The generally accepted accounting principle that supports recording the value of a property at the p...

A: Monetary principle says that a business should only record transaction if it is measured in monetary...

Q: How does Declan's Designs' Bank Loan impact its 2022 Statement of Cash Flows? Question 27 options...

A: The cash flow statement is prepared to record the cash flow from various activities during the perio...

Q: 1. How much is the increase in the capital of Choy after taking into account all transactions?

A: Financial statements are the set of records of the financial transactions and position of a business...

Q: 18,000 4,800 24,000 8,000 eivable vable 760 ank 15,600

Q: Under the cash basis of accounting, revenue is recorded When earned When realized ...

A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are inc...

Q: Bulgasal Company provided the following data: 2020 2021 Share capital (P100 par value) 5,000,000 5...

A: Solution Given 2020 2021 Share capital (P100 par value) 5,000,000 5,850,000 Sh...

Q: Redlands Inc. sells one product for $5. The variable cost per item is $3, and the fixed costs for th...

A: Hi student Since there are multiple questions, we will answer only first question. Since first quest...

Q: How much is the balance of the note payable as of December 31, 2021 arising from the purchase of mac...

A: Down payment for machinery=100000 Notes payable 4 of 250000 each Total Notes payable of 10,00,000

Q: Companies recognize revenue as earned and record the revenue when __________. A. the customer's orde...

A: Hi student Since there are multiple questions, we will answer only first question.

Q: a. Calculate the unit cost for each product using the appropriate cost drivers for each product. Not...

A: Solution Note : As per the Q&A guideline we are required to answer the first three subparts only...

Q: Menlo Company distributes a single product. The company's sales and expenses for last month follow: ...

A: Since you have posted a question with multiple sub-parts , we will do the first three sub-parts for ...

Q: Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For th...

A: Interest payable is a current liability. Increase or decrease in current liabilities affect the "Cas...

Q: A UV machine cost 550,000 pesos and has a salvage value of 10% of its cost at the end of its economi...

A: Formula: Depreciation in the first year = Depreciation per hour x Number of hours used

Q: Entity A had 200,000 ordinary shares outstanding all throughout 20x1. In 20x2, share issuances occur...

A: Earning per Share: It indicates a company's profitability and is calculated by dividing a company's ...

Q: t 31 December 20X7, what should be the arrying amount of its interest in Northfield,

Q: On October 1, Goodwell Company rented warehouse space to a tenant for $1,600 per month and received ...

A: Formula: Unearned revenue Account = Cash received in Advance - Rent revenue

Q: How does the Loss on Sale of PPE impact Declan's Designs' 2022 Statement of Cash Flows? Questi...

A: Operating Activities - Under this activity all the company operation-related activities like sales, ...

Q: LOUD BASE WIRELESS sells a variety of mobile telephone accessories including several brands of Wirel...

A: Solution A Journal is an company's official book in which all business transactions are recorded in ...

Q: What are the problems of an insurance industry that are primarily regulated at the state level?

A: Insurance industry refers to the market where insurance companies play an active part in providing i...

Q: On October 1, Goodwell Company rented warehouse space to a tenant for $1,600 per month and received ...

A: The Unearned revenue is the revenue received but not earned yet. It is a current liability for the b...

Q: The 2021 financial statement audit of OMG company began when the trial balance was received from man...

A: Answer: Given case: The schedule of liabilities to vendor showed that the company has only five supp...

Q: On September 1, 2019, Jordan, Inc. acquired a patent for $600,000. The patent has 16 years remaining...

A: Date Account Titles and Explanation Debit Credit Sep'1 Patent $6,00,000 Cash $6,00,0...

Q: How do businesses recover the cost of capitalized, intangible assets? O Direct write-off O Depreciat...

A: Intangible assets are non-monetory assets and do not have physical existence. It includes goodwill p...

Q: what accounts are included in the statement of cashflow?

A: The cash flow statement is prepared to record the cash flow from various activities during the perio...

Q: changes with the type of company is:

A: Balance Sheet is the statement showing financial position of the busi...

Q: On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-inte...

A: Note payable is to be measured at present value of all future cash inflows using market interest rat...

Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

1. How much of the transactions below should be charged against CELESTINE's Net Income for the year ended 2020?

2. Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below.

CELESTINE CORPORATION was organized on 2019. Its accounting records include only one
account for all intangible assets. The following is a summary of the debit entries that have been
recorded and posted during 2019 and 2020:
INTANGIBLE ASSETS
July 1, 2019 8-year franchise; expires June 30, 2027
126,000
Advance payment on leasehold (term of lease is 2 years)
December 31, 2019 Net loss 2019 including incorporation fee, P3,000 and related
legal fees of organizing. P15, 000 (all fees incurred in 2019)
Acquired patent A (25-year life determined by company)
October 1, 2019
84,000
48,000
January 2, 2020
222,000
March 1, 2020
Cost of developing secret formula
Goodwill purchased
May 1, 2020 Goodwill arising from business combination
May 1, 2020 Acquired copyright from the business combination with book
225,000
April 1, 2020
835,200
850,000
200,000
value (amortized for 20 years and expiring in October 2020)
June 1, 2020 Registered Patent B at the patenting office
July 1, 2020 Legal fee for successful defense of patent purchased above
September 1, 2020 Legal fees for merger and acquisition documents related to the
150,000
37,950
business combination
Research and development costs
November 30, 2020 Purchased Patent C with useful life of 5 years
50,000
480,000
October 1, 2020
120,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions: Required: 1. Check the accuracy of the accumulated depreciation balances at December 31, 2019. Round to the nearest whole dollar in all requirements. 2. Prepare journal entries to record the preceding events in 2020, as well as the year-end recording of depreciation expense. 3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance.
Lee Manufacturing Corporation was incorporated on January 3, 2018. The corporations financial statements for its first years operations were not examined by a CPA. You have been engaged to examine the financial statements for the year ended December 31, 2019, and your examination is substantially completed. Lees trial balance at December 31, 2019, appears as follows: The following information relates to accounts that may vet require adjustment: 1. Patents for Lees manufacturing process were acquired January 2, 2019, at a cost of 68,000. An additional 17,000 was spent in December 2019 to improve machinery covered by the patents and charged to the Patent account. Depreciation on fixed assets has been properly recorded for 2019 in accordance with Lees practice which provides a full years depreciation for property on hand June 30 and no depreciation otherwise. Lee uses the straight-line method fix all depreciation and amortization and amortizes its patents over their legal life. 2. On January 3. 2018, Lee purchased licensing Agreement No. 1, which was believed to have an indefinite useful life. The balance in the licensing Agreement No. 1 account includes its purchase price of 48,000 and costs of 2,000 related to the acquisition. On January 1, 2019, Lee purchased licensing Agreement No. 2, which has a life expectancy of 10 years. The balance in the Licensing Agreement No. 2 account includes its 48,000 purchase price and 2,000 in acquisition costs, but it has been reduced by a credit of 1,000 for the advance collection of 2020 revenue from the agreement. In late December 2018, an explosion caused a permanent 60% reduction in the expected revenue-producing value of licensing Agreement No. 1, and in January 2020 a flood caused additional damage that rendered the agreement worthless. 3. The balance in the Goodwill account includes (a) 8,000 paid December 30, 2018, for newspaper advertising for the next 4 years following the payment, and (b) legal costs of 16,000 incurred for Lees incorporation on January 3, 2018. 4. The Leasehold Improvements account includes (a) the 15,000 cost of improvements with a total estimated useful life of 12 years, which Lee, as tenant, made to leased premises in January 2018; (b) movable assembly line equipment costing 8,500 that was installed in the leased premises in December 2019; and (c) real estate taxes of 2,500 paid by Lee in 2019, which under the terms of the lease should have been paid by the land-lord. Lee paid its rent in full during 2019. A 10-year nonrenewable lease was signed January 3, 2018, fix the leased building that Lee used in manufacturing operations. 5. The balance in the Organization Costs account includes costs incurred during the organizational period. Required: Prepare a worksheet (spreadsheet) to adjust accounts that require adjustment and prepare financial statements. Formal adjusting journal entries and financial statements are not required. No intangible assets are impaired at the end of 2019. Ignore income taxes.
Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.
Petes Petroleum, Inc., an SEC registrant with a calendar year-end, is in the business of constructing and operating offs] lore oil platforms. Petes Petroleum is required legally to dismantle and remove the platforms at the end of their useful lives, which is estimated to be 10 years. On January 1, 2019, Pete constructed and began operating an offshore oil platform off the coast of Brazil. The total capitalized cost to construct the platform was 3,700,000. In addition, while the future cost of dismantling the oil platform is difficult to estimate, Pete believes there is a 40% chance that the future cost will be 1,425,000, a 40% chance it will be 1,650,000, and a 20% chance that it will cost 2,125,000. The appropriate discount rate is 12%, and Pete uses the straight-line method of depreciation. Required: 1. Prepare the journal entries that Pete should record in 2019 related to the oil platform. 2. Prepare an amortization schedule for the asset retirement obligation. 3. Next Level Prepare a table showing the effect of accounting for the asset retirement obligation on assets, liabilities, shareholders equity, and net income relative to accounting for the associated costs at the end of the assets service life when the expenditure is made.