MC27 On November 1, 2019, a newly established manufacturing outfit paid cash to acquire a patent for P1,200,000, a copyright for P750,000, and a franchise for P60,000. The patent expires at the end of 2020, has a total legal life of 20 years in the Philippines and is expected to produce benefits only for 5 years. The copyright has a service life of 10 years. The franchise allows the company to be exclusive sales agent for two years effective November 1, 2019. The amortization amount for the intangibles in 2019 is

MC27 On November 1, 2019, a newly established manufacturing outfit paid cash to acquire a patent for P1,200,000, a copyright for P750,000, and a franchise for P60,000. The patent expires at the end of 2020, has a total legal life of 20 years in the Philippines and is expected to produce benefits only for 5 years. The copyright has a service life of 10 years. The franchise allows the company to be exclusive sales agent for two years effective November 1, 2019. The amortization amount for the intangibles in 2019 is

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 7MC

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(Appendix 14.1)Pamlico Company has a 500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of 75,000 for 50,000 cash and marketable securities having a current market value of 375,000. Pamlicos acquisition cost of the securities is 385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement? a. 65,000 b. 75,000 c. 140,000 d. 150,000
On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
Mystic Pizza Company purchases a franchise from NY Pizzeria Inc. for 96,000 on June 1, 2019. The franchise will last 8 years. Record Mystic Pizzas purchase of the franchise on June 1 and adjusting entry at the end of 2019.
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How does a company record a patent worth 100,000 if: (a) it has just purchased it for 90,000? (b) the company has internally developed it at a cost of 50,000 and paid 1,000 in legal and filing fees?
On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
On November 1, 2019, a newly established manufacturing outfit paid cash to acquire a patent for P1,200,000, a copyright for P750,000, and a franchise for P60,000. The patent expires at the end of 2020, has a total legal life of 20 years in the Philippines and is expected to produce benefits only for 5 years. The copyright has a service life of 10 years. The franchise allows the company to be exclusive sales agent for two years effective November 1, 2019. The amortization amount for the intangibles in 2023 is b. 65, 500 Someone give me a solution for this answer.
9. In 2020, ABC Machine Company spent P352,000 on research and development costs for an invention. This invention was patented on January 2, 2021, paying P24,000 for licensing and legal fees to secure it. The patent has a legal life of 17 years and an estimated useful life of 8 years. In January 2025, ABC paid P32,000 for legal fees in a successful defense of the patent. Related to the patent, the expense for the year 2025 is?
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Alexandria Company started a research and development project on a new product on January 1, 2021. Total cost incurred before reaching technological feasibility amounted to P4,000,000 while development cost after reaching technological feasibility amounted to P5,000,000 before year-end. Prior to commercial production, the entity paid legal and registration fees amounting to P1,000,000 in filing for a patent on the new product on July 01, 2021. Early in January 2022, an additional amount of P2,000,000 was incurred to develop the project to full manufacturing stage. The patent was approved in early January 2022 and valid for 20 years. However, the entity expected technological advancements will render the new product virtually obsolete by December 31, 2026. The entity decided to account separately any capitalized development cost. 1.What amount should be capitalized as cost of patent? a. 1,000,000 b. 6,000,000 c. 7,000,000 d. 5,000,000 2.What amount should be capitalized as…
Ma1. Ford Corporation estimates the fair value of its trademark is estimated to be $560,000. The current carrying value of the trademark on the books is $610,000. Yana expects that over the remaining useful life of the trademark, the trademark will help to generate $620,000 in net cash flows. Does Ford need to make any adjustments at year-end to properly present the trademark on the balance sheet?