Wildhorse Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. Intangible Assets 7/1/20 8-year franchise; expiration date 6/30/28 $52,800 10/1/20 Advance payment on laboratory space (2-year lease) 24,000 12/31/20 Net loss for 2020 including state incorporation fee, $1,500, and related legal fees of organizing, $5,500 (all fees incurred in 2020) 12,400 1/2/21 Patent purchased (10-year life) 83,800 3/1/21 Cost of developing a secret formula (indefinite life) 88,000 4/1/21 Goodwill purchased (indefinite life) 274,600 6/1/21 Legal fee for successful defense of patent purchased above 13,685 9/1/21 Research and development costs 173,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To clear the Intangible Assets) (To record current amount for Franchises) (To record current amount for Rents) (To record current amount for Patents) Reflecting all balances accurately as of that date. (Ignore income tax effects.) $ $ $ $
Wildhorse Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. Intangible Assets 7/1/20 8-year franchise; expiration date 6/30/28 $52,800 10/1/20 Advance payment on laboratory space (2-year lease) 24,000 12/31/20 Net loss for 2020 including state incorporation fee, $1,500, and related legal fees of organizing, $5,500 (all fees incurred in 2020) 12,400 1/2/21 Patent purchased (10-year life) 83,800 3/1/21 Cost of developing a secret formula (indefinite life) 88,000 4/1/21 Goodwill purchased (indefinite life) 274,600 6/1/21 Legal fee for successful defense of patent purchased above 13,685 9/1/21 Research and development costs 173,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To clear the Intangible Assets) (To record current amount for Franchises) (To record current amount for Rents) (To record current amount for Patents) Reflecting all balances accurately as of that date. (Ignore income tax effects.) $ $ $ $
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 9P: During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the...
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Question
Wildhorse Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021.
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Reflecting all balances accurately as of that date. (Ignore income tax effects.)
Intangible Assets
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7/1/20 | 8-year franchise; expiration date 6/30/28 | $52,800 | ||
10/1/20 | Advance payment on laboratory space (2-year lease) | 24,000 | ||
12/31/20 | Net loss for 2020 including state incorporation fee, $1,500, | |||
and related legal fees of organizing, $5,500 (all fees incurred in 2020) | 12,400 | |||
1/2/21 | Patent purchased (10-year life) | 83,800 | ||
3/1/21 | Cost of developing a secret formula (indefinite life) | 88,000 | ||
4/1/21 | 274,600 | |||
6/1/21 | Legal fee for successful defense of patent purchased above | 13,685 | ||
9/1/21 | Research and development costs | 173,000 |
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
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(To clear the Intangible Assets)
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(To record current amount for Franchises)
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(To record current amount for Rents)
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(To record current amount for Patents)
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Reflecting all balances accurately as of that date. (Ignore income tax effects.)
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