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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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- Carla Vista Electric Inc. has the following amounts included in its general ledger at December 31, 2023: Organization costs $34,600 Purchased trademarks 18,400 Development phase activities (meet all six development phase criteria) 30,300 Deposits with advertising agency for ads to promote goodwill of company 8,500 Excess of cost over fair value of identifiable net assets of acquired subsidiary 80,600 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 125,600 Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years 75,000 Payment for a favourable lease; lease term of 10 years 14,400 (a) Based on the information provided, calculate the total amount for Carla Vista to report as intangible assets on its statement of financial position at December 31, 2023. Assume Carla Vista uses IFRS to prepare its financial statements.Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2020: Organization costs $34,000 Purchased trademarks 17,500 Development phase activities (meet all six development phase criteria) 29,000 Deposits with advertising agency for ads to promote goodwill of company 8,000 Excess of cost over fair value of identifiable net assets of acquired subsidiary 81,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 125,000 Cost of researching a secret formula for a product that is expected to be marketed for at least 20 years 75,000 Payment for a favourable lease; lease term of 10 years 15,000 Instructions:a) Based on the information provided, calculate the total amount for Berrie to report as intangible assets on its statement of financial position at December 31, 2020. Assume Berrie uses IFRS to prepare its financial statements.…A company prepares its financial statements according to International Financial Reporting Standards. During 2024 the company incurred $1,265,000 in research expenditures to develop a new product. An additional $776,000 in development expenditures were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2024 fiscal year. Sale of the product began in 2023. What amount of the above expenditures would be expensed in the 2024 income statement?
- Berrie Electric Inc. has the following amounts included in its general ledger at December 31, 2023: Organization costs$ 34,000 Purchased trademarks17,500 Development phase activities (meet all six development phase criteria)29,000 Deposits with advertising agency for ads to promote goodwill of company8,000 Excess of cost over fair value of identifiable net assets of acquired subsidiary81,000 Cost of equipment acquired for research and development projects; the equipment has an alternative future use125,000 Costs of researching a secret formula for a product that is expected to be marketed for at least 20 years75,000 Payment for a favourable lease; lease term of 10 years15,000 Instructions Based on the information provided, calculate the total amount for Berrie to report as intangible assets on its statement of financial position at December 31, 2023. Assume Berrie uses IFRS to prepare its financial statements.Please indicate the appropriate category of the following items: Question 23 options: Cost of equipment obtained under capital lease Land Goodwill acquired Music Copyrights The cost of developing a patent The cost of purchasing a patent Brand Names Research costs The cost of an annual update of payroll software Goodwill generated internally 1. Intangible Asset 2. Tangible Asset 3. Expense 4. Other (none of the above) 5. Not recorded on financial statementsConsider the following information from a company's records for 2020: Materials used in research and development projects $4,500 Equipment acquired that will have alternative future uses in future R&D projects for five years 1,500 Personnel costs of employees involved in R&D projects 5,500 Consulting fees paid to outsiders for R&D projects 2,800 Indirect costs reasonably allocable to R&D projects 250 Legal fees associated with registration of a patent resulting from a 2020 R&D project 2,500 Required:Compute the amount of R&D costs that should be classified as expenses in determining 2020 net income. $ _______
- 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…Indicate whether the following items are capitalized or expensed in the current year. a. Purchase cost of a patent from a competitor. b. Research and development costs. c. Organizational costs. d. Costs incurred internally to create goodwill.Joni Marin Inc. has the following amounts reported in its general ledger at the end of the current year. Organization costs $24,400 Trademarks 16,900 Discount on bonds payable 37,400 Deposits with advertising agency for ads to promote goodwill of company 12,400 Excess of cost over fair value of net identifiable assets of acquired subsidiary 77,400 Cost of equipment acquired for research and development projects; the equipment has an alternative future use 87,400 Costs of developing a secret formula for a product that is expected to be marketed for at least 20 years 83,800 (a)On the basis of this information, compute the total amount to be reported by Marin for intangible assets on its balance sheet at year-end. Total amount reported for intangible assets __________
- Stag, a public limited company, is preparing its financial statements for the year ending 31 December 2021. The exhibits contain information relevant to the question Exhibit 2 – Research and Development Stag plc started a project on 1 January 2021. The initial costs of setting up the project incurred before 2021 were £2 million. From 1 January 2021 to 31 March 2021 ongoing project costs were £15,000 per month. On 1 April 2021, the project was considered to be technically feasible and commercially viable and from this date, project costs increased to £65,000 per month. From 1 July 2021 to 30 August 2021, additional £1.5 million was spent for the design and construction of a pilot for the project. This pilot is not capable of operating on a scale economically feasible for commercial production. From 1 September 2021 to 31 December 2021, additional £350,000 were also spent for testing of the pilot. Between 1 April 2021 and 31 December 2021, Stag spent £140,000 on research staff, £50,000…Assume REH AG, a hypothetical company, incurs expenditures of €1,000 per monthduring the fiscal year ended 31 December 2009 to develop software for internal use.Under IFRS, the company must treat the expenditures as an expense until the softwaremeets the criteria for recognition as an intangible asset, after which time the expenditurescan be capitalized as an intangible asset.1. What is the accounting impact of the company being able to demonstrate that thesoftware met the criteria for recognition as an intangible asset on 1 February versus1 December?2. How would the treatment of expenditures diff er if the company reported under U.S.GAAP and it had established in 2008 that the project was likely to be completed?Assume REH AG, a hypothetical company, incurs expenditures of AC1,000 per month during the fiscal year ended December 31, 2019 to develop software for internal use. Under IFRS, the company must treat the expenditures as an expense until the software meets the criteria for recognition as an intangible asset, after which time the expenditures can be capitalized as an intangible asset. 1 What is the accounting impact of the company being able to demonstrate that the software met the criteria for recognition as an intangible asset on February 1 versus December 1? 2 How would the treatment of expenditures differ if the company reported under US GAAP and it had established in 2018 that the project was likely to be completed and the software used to perform the function intended?