Paid incorporation fees. 11 Paid legal fees for the organization of the company. 25 Paid for large-scale advertising campaign for the year. $17,500 7,500 15,000 Jan. 2 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. Apr. 1 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 10,000 June 30 Paid expenses related to obtaining a patent. Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for 2 years, after which it will have no residual value. Dec. 11 Paid salaries of employees involved in R&D. 12,000 30,000 31

Paid incorporation fees. 11 Paid legal fees for the organization of the company. 25 Paid for large-scale advertising campaign for the year. $17,500 7,500 15,000 Jan. 2 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. Apr. 1 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 10,000 June 30 Paid expenses related to obtaining a patent. Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for 2 years, after which it will have no residual value. Dec. 11 Paid salaries of employees involved in R&D. 12,000 30,000 31

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter3: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 51P

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Freitas Corporation was organized early in 2018. The following expenditures were made during the first fewmonths of the year:Attorneys’ fees in connection with the organization of the corporation $ 12,000State filing fees and other incorporation costs 3,000Purchase of a patent 20,000Legal and other fees for transfer of the patent 2,000Purchase of equipment 30,000Pre-opening salaries and employee training 40,000Total $107,000Required:Prepare a summary journal entry to record the $107,000 in cash expenditures
On January 1, 2021, John Kyle Corporation acquired land that will be used for management's office. This land cost 1,000,000. The entity borrowed 2,000,000 with an annual interest of 10% specifically for the construction of the office building and 5,000,000 with an annual interest of 12% for general purpose. The company's capital expenditure amounts to 2,000,000 on January 1, 2021, 1,000,000 on June 30, 2021, 800,000 on September 30, 2021 and 1,000,0000 on January 1, 2022. The construction of the new building ended at June 30, 2022. What is the borrowing cost capitalized in December 31, 2021? * P270,000 P324,000 P416,000 P284,000
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