On June 2, 2021, Tabitha Co. purchased a franchise for $589,000 by signing a five-year contract. At the end of the five years, the franchise right reverts back to the seller. On September 1, 2023, Tabitha decides to sell the franchise right for $343,000. The company amortizes intangible assets using the straight-line method and records partial-year amortization based on the number of months in service. Assuming the company has a December 31 year-end, what is the gain or loss recorded on the sale of the patent?
On June 2, 2021, Tabitha Co. purchased a franchise for $589,000 by signing a five-year contract. At the end of the five years, the franchise right reverts back to the seller. On September 1, 2023, Tabitha decides to sell the franchise right for $343,000. The company amortizes intangible assets using the straight-line method and records partial-year amortization based on the number of months in service. Assuming the company has a December 31 year-end, what is the gain or loss recorded on the sale of the patent?
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 5RE: Mystic Pizza Company purchased a patent from Prime Pizza Plus on January 1, 2019, for 72,000. The...
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