The Western Company, a company that follows IFRS, provided you with the following information about a number of transactions that took place in 2020: On January 1, 2020 Western acquired a patent for $45,000 cash. The patent expires on January 1, 2028, but the company determined that it will generate future benefits for 6 years from the date of acquisition. During 2022, the total useful life of the patent was revised to 4 years.During March 2020, The Wester Company invested $120,000 in research costs about a new product that it aims to develop in 2021. The amount was paid in cash.The Western Company estimates that its internal goodwill is worth $980,000 in July 2020. Required-Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022.Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.

Given, On Jan. 1, 2020 : Acquired Patent for Cash = $ 45,000

Answered: The Western Company, a company that…

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...

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The Western Company, a company that follows IFRS, provided you with the following information about a number of transactions that took place in 2020:

On January 1, 2020 Western acquired a patent for $45,000 cash. The patent expires on January 1, 2028, but the company determined that it will generate future benefits for 6 years from the date of acquisition. During 2022, the total useful life of the patent was revised to 4 years.
During March 2020, The Wester Company invested $120,000 in research costs about a new product that it aims to develop in 2021. The amount was paid in cash.
The Western Company estimates that its internal goodwill is worth $980,000 in July 2020.

Required-

Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022.
Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.

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