The Horstmeyer Corporation commenced operations early in 2021. A number of expenditures were made during 2021 that weredebited to one account called intangible asset. A recap of the $252,500 balance in this account at the end of 2021 is as follows:DateTransactionAmountState incorporation fees and legal costs related to organizing the corporationFire insurance premium for three-year periodPurchased a copyrightResearch and development costsLegal fees for filing a patent on a new product resulting from an R&D project$ 9,5007,50040,00060, 0007,50032,00060, 00036,000February 3March 1March 15April 30June 15September 30 Legal fee for successful defense of patent developed aboveEntered into a 10-year franchise agreement with franchisorAdvertising costsOctober 13VariousTotal$252,500Required:Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, othertypes of assets, and expenses indicated by the transactions. (If no entry is required for a transaction/event, select "No journal entryrequired" in the first account field.)View transaction listJournal entry worksheet

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

The Horstmeyer Corporation commenced operations early in 2021. A number of expenditures were made during 2021 that were debited to one account called intangible asset. A recap of the $252,500 balance in this account at the end of 2021 is as follows: Date Transaction Amount $ 9,500 7,500 State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project February 3 March 1 March 15 40,e00 60, e00 7,500 32,000 60, ee0 36,000 April 30 June 15 September 30 Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs October 13 Various Total $252,500 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The Horstmeyer Corporation commenced operations early in 2021. A number of expenditures were made during 2021 that were debited to one account called intangible asset. A recap of the $252,500 balance in this account at the end of 2021 is as follows: Date Transaction Amount $ 9,500 7,500 State incorporation fees and legal costs related to organizing the corporation Fire insurance premium for three-year period Purchased a copyright Research and development costs Legal fees for filing a patent on a new product resulting from an R&D project February 3 March 1 March 15 40,e00 60, e00 7,500 32,000 60, ee0 36,000 April 30 June 15 September 30 Legal fee for successful defense of patent developed above Entered into a 10-year franchise agreement with franchisor Advertising costs October 13 Various Total $252,500 Required: Prepare the necessary journal entry to clear the intangible asset account and to set up accounts for separate intangible assets, other types of assets, and expenses indicated by the transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 17P: On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and...

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Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
Lee Manufacturing Corporation was incorporated on January 3, 2018. The corporations financial statements for its first years operations were not examined by a CPA. You have been engaged to examine the financial statements for the year ended December 31, 2019, and your examination is substantially completed. Lees trial balance at December 31, 2019, appears as follows: The following information relates to accounts that may vet require adjustment: 1. Patents for Lees manufacturing process were acquired January 2, 2019, at a cost of 68,000. An additional 17,000 was spent in December 2019 to improve machinery covered by the patents and charged to the Patent account. Depreciation on fixed assets has been properly recorded for 2019 in accordance with Lees practice which provides a full years depreciation for property on hand June 30 and no depreciation otherwise. Lee uses the straight-line method fix all depreciation and amortization and amortizes its patents over their legal life. 2. On January 3. 2018, Lee purchased licensing Agreement No. 1, which was believed to have an indefinite useful life. The balance in the licensing Agreement No. 1 account includes its purchase price of 48,000 and costs of 2,000 related to the acquisition. On January 1, 2019, Lee purchased licensing Agreement No. 2, which has a life expectancy of 10 years. The balance in the Licensing Agreement No. 2 account includes its 48,000 purchase price and 2,000 in acquisition costs, but it has been reduced by a credit of 1,000 for the advance collection of 2020 revenue from the agreement. In late December 2018, an explosion caused a permanent 60% reduction in the expected revenue-producing value of licensing Agreement No. 1, and in January 2020 a flood caused additional damage that rendered the agreement worthless. 3. The balance in the Goodwill account includes (a) 8,000 paid December 30, 2018, for newspaper advertising for the next 4 years following the payment, and (b) legal costs of 16,000 incurred for Lees incorporation on January 3, 2018. 4. The Leasehold Improvements account includes (a) the 15,000 cost of improvements with a total estimated useful life of 12 years, which Lee, as tenant, made to leased premises in January 2018; (b) movable assembly line equipment costing 8,500 that was installed in the leased premises in December 2019; and (c) real estate taxes of 2,500 paid by Lee in 2019, which under the terms of the lease should have been paid by the land-lord. Lee paid its rent in full during 2019. A 10-year nonrenewable lease was signed January 3, 2018, fix the leased building that Lee used in manufacturing operations. 5. The balance in the Organization Costs account includes costs incurred during the organizational period. Required: Prepare a worksheet (spreadsheet) to adjust accounts that require adjustment and prepare financial statements. Formal adjusting journal entries and financial statements are not required. No intangible assets are impaired at the end of 2019. Ignore income taxes.
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and amortization expense to the nearest whole year. During 2020, Vail engaged in the following transactions: Required: 1. Check the accuracy of the accumulated depreciation balances at December 31, 2019. Round to the nearest whole dollar in all requirements. 2. Prepare journal entries to record the preceding events in 2020, as well as the year-end recording of depreciation expense. 3. Prepare an Accumulated Depreciation account for each category of assets, enter the beginning balance, post the journal entries from Requirement 2, and compute the ending balance.
Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.