On January 2, 1998, the Jackson Corporation acquired patent rights from the Cooper Company for $85,000, incurring legal costs of $5,000. Although the patent will not expire for 17 years, its estimated useful is only 15 years. Journalize the entry to amortize the patent at the end of the current fiscal year.
Q: VirusGo Inc. purchased a patent on January 1, 2017, for $800,000 for non-fogging face masks. At the…
A: The intangible assets are not depreciated every year but get amortized with the passage of time.
Q: Izzy Inc. purchased a patent for $350,000 which has an estimated useful life of 10 years. Its…
A:
Q: Ivanhoe Company incurred research and development costs of $ 90000 and legal fees of legal life of…
A: The cost of the patent includes the legal expenses incurred for the registration and documentation.…
Q: On January 1, 2015, Moose Co. purchased for $360,000 a patent that had been granted two years…
A: Introduction: Intangible Asset: Assets which cannot seen or touch called Intangible assets. Example:…
Q: On January 2, 2018, David Corporation purchased a patent for $500,000. The remaining legal life is…
A:
Q: Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25…
A: Amortization per year = Purchase Cost / expected useful life =$50,000 / 5 years =$10,000
Q: Reported in the ledger of Mayumi Company On December 31, 2017, is a Patent account with a balance of…
A: As per the accounting standards the carrying value of patent is equal to the purchase cost of…
Q: For each of the following unrelated situations, calculate the annual amortization expense and…
A: a. Amortization expense for patent = Purchase cost / commercially exploitable life = $350,000 / 8…
Q: MG Corporation acquired a patent for a new product for $260,000 on 2 January 2013 with a useful life…
A: Solution: Annual amortization expense on Patent = Cost of patent / Estimated useful life = $260,000…
Q: Reported in the ledger of Mayumi Company On December 31, 2017, is a Patent account with a balance of…
A: Balance of patent as on 31 December 2017 = P 120,000 Useful life of an asset = 8 years Amount of…
Q: CP, Inc.. purchases a patent on January 1, 20X1, for $40,000 and the patent has an expected useful…
A: Amortization refers to charging the portion of the cost of an asset to profit and loss every year…
Q: On January 1, 2018, EM purchased a patent for a new consumer product for ₱4,800,000. At the time of…
A: The Patent useful life was 10 years but after purchase useful life changed to 8 years. Therefore…
Q: On January 1, 20x1, Entity A purchases a patent from Entity B for 300,000. Entity B, has helped the…
A: The patent is an intangible asset that is amortized over its useful life but not more than its legal…
Q: March 1, 2021, Bharat Corporation purchased an equipment for P500,000 with an estimated residual…
A: Bharat corporation would recognise the lease rentals received +Lease bonus if any received and less…
Q: Sunland Co. bought a patent from Carla Vista Corp. on January 1, 2021, for $918000. An independent…
A: Intangible assets: These are long-term assets having no physical existence. However, the benefits…
Q: SE9-7. Amortization Expense Smith & Daughters obtained a patent for a new optical scanning device.…
A: Calculation of amortization expenses: Amortization Expenses = Patent CostUseful life=$9000012=$7,500…
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…
Q: Nieland Industries had one patent recorded on its books as of January 1, 2020. This patent had a…
A:
Q: Janes Company provided the following information on intangible assets: A patent was purchased from…
A: Intangible assets are the assets which are not visible in nature but contains value which generates…
Q: On January 1, 2021, Weaver Corporation purchased a patent for $231,000. The remaining legal life is…
A: Amortization expense = Cost of patent / Estimated useful life = $231,000 / 6 = $38,500 Amortization…
Q: The patent, which originally cost P 17,000, is being amortized to Administrative Expense over a…
A: The entries passed in the books of accounts in order to fix the errors or incorrect entries which…
Q: On January 4, 2021, the Franc Company purchased for P27,000 a patent that had been filed eight…
A: Given the following information: On January 4, 2021, the Franc Company purchased for $27,000 a…
Q: On January 1, 2018, Sally, Inc. bought a patent for $100,000. There were ten years left of the…
A: Patent amortization is a system of recording or charging price, through which companies allocate the…
Q: Kleen Company acquired patent rights on January 10 of Year 1 for $336,000. The patent has a useful…
A: GIVEN Kleen Company acquired patent rights on January 10 of Year 1 for $336,000. The patent has…
Q: 5. On January1, Red Manufacturing paid $52,000 for a patent. Although it gives legal protection for…
A: Amortization is a strategy used in accounting to reduce the book value of a loan or intangible asset…
Q: VirusGo Inc. purchased a patent on January 1, 2017, for $800,000 for non-fogging face masks. At the…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: Stars Corporation incurred a P198,900 of research and development costs to develop a product for…
A: January 2, 2017: Legal cost and other costs of patent = P44,200 Useful economic life = 20 years On…
Q: On January 1, 2020, Russell Company purchased a copyright for $2,000,000, having an estimated useful…
A: Intangible assets is recognized at purchase cost and legal fees paid in a successful defense and any…
Q: On January 1, 2017, Honey company acquired a patent for a drug with a remaining legal and useful…
A:
Q: Hepburn Company bought a copyright for $120,000 on January 1, 2018, at which time the copyright had…
A: In straight line depreciation we assume there is uniform annual depreciation of assets and it is…
Q: May I ask for help with this question? I got an answer of 37,500 (Rounded Up) Please check. On…
A: The amortization of expense is the write-off of an intangible asset as per its legal useful life.
Q: ze full year’s amortization in the year of acquisition and none in the year of derecognition. How…
A: Given: To calculate the profit or loss on the recognized company in the 20x3 statement as,
Q: On Jan 1, 20X1, ABC Corp purchased a patent for P90,000. At the time of purchase the patent was…
A: Amortization is the diminution in the worth of the intangible asset as per the life of the asset…
Q: For each of the following unrelated situations, calculate the annual amortization expense and…
A: Patent Amortization: The annual patent amortization expenses are equal to the value of a patent is…
Q: Brazen Company purchased a patent on January 1, 2015 for P6.000,000. The original life of the patent…
A: Value of patent amortization from 1 Jan, 2015 to 1 Jan, 2020= 6,000,000*5/15 =2,000,000 Since the…
Q: Marigold Company purchases a patent for $504,000 on January 2, 2022. Its estimated useful life is 18…
A: Amortization expense = Cost of patent/Useful life
Q: Maris Co. purchased a machine on January 1, 2020, for $2,500,000 for the express purpose of leasing…
A: Annual depreciation=$2,500,0005=$500,000
Q: Aramex Company purchased a patent from Datco Company for $220,000 on July 1, 2012. Expenditures of…
A: Carrying value is an accounting indicator of value that bases the value of an asset or entity on the…
Q: Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P…
A: The cost incurred in defending the patent infringement would be capitalized by including in the…
Q: In early January 2020, Sunland Corporation applied for and received approval for a trade name,…
A: Given, Total Legal fee paid in Early January 2020: $ 44800: Applied and received approval for…
Q: On January 2, 2021, Harlan Company purchased a patent for $48,000. The patent has an estimated…
A: A patent appears to be a legal privilege awarded by a sovereign authority to an inventor. In…
Q: XYZ Corporation incurred the following costs in 2020: • XYZ Corporation purchased a patent from ABC…
A: Intangible assets include: Goodwill Patent Copyright Trademark
Q: On January 1, 2022, Christine Company acquired a trademark for P3,000,000. The trademark has eight…
A: Calculation of impairment loss shall be done by comparing the carrying value with the recoverable…
Q: On January 4, 2016, Franc Company purchased for $30,000 a patent that had been filed 8 years…
A: Amortization means reducing the book value of an intangible asset regularly. It is spreading the…
Q: Stephan Curry, Inc., spent $68,000 in attorney fees while developing the trade name of its new…
A:
Q: At the beginning of the year, a company acquired a patent for $830,000, and also a trademark for…
A: Note: Trademark is not amortized because it is considered to have an infinite useful life.
Q: Smith and Sons obtained a patent for an new optical scanning device. The fees incurred to file for…
A: Journal entry: it is prepared to record the financial and non financial transaction of the business…
On January 2, 1998, the Jackson Corporation acquired patent rights from the Cooper
Company for $85,000, incurring legal costs of $5,000. Although the patent will not
expire for 17 years, its estimated useful is only 15 years.
amortize the patent at the end of the current fiscal year.
Step by step
Solved in 2 steps with 1 images
- For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.Warriors Productions recently purchased a copyright. Although the copyright is expected to last a minimum of twenty-five years, the chief executive officer of the company believes this B-list movie will only be useful for the next fifteen years. Calculate the amortization expense and record the journal for the first years expense. The total cost of the copyright was $15,000.For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.
- Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
- 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.At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
- Warriors Production recently purchased a copyright on its new film. Although the copyright is expected to last a minimum of twenty-five years, the chief executive officer of the company believes this B-list movie will only be useful for the next five years. Calculate the amortization expense and record the journal for the first-year expense. The total cost of the copyright was $23,500.On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.Steel Magnolia Incorporated purchased a trademark 7 years ago for 275,000. Steel Magnolia believed the trade-mark would have an indefinite life. At the end of 2020, the corporation believes the fair value of the trademark is 189,000. Record the impairment loss for Steel Magnolia.