INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
9th Edition
ISBN: 9781260180657
Author: SPICELAND
Publisher: MCG
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Chapter 11, Problem 11.6BE
To determine
Asset: Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue.
Disposal of assets:
Disposal is an activity of selling the worn-out assets that is no longer in need for the business, in return of some consideration. Disposal may be made in any of the following situations:
- Disposal with no gain no loss: When the asset is disposed with no consideration received.
- Disposal with gain: When the asset is disposed for more than its book value (original cost less
accumulated depreciation ). - Disposal with loss: When the asset is disposed for less than its book value.
To Prepare: The journal entries to record the sales of the patent and equipment.
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Exercise 11-19 (Algo) Amortization [LO11-4, 11-5]
Janes Company provided the following information on intangible assets:
a. A patent was purchased from the Lou Company for $1,350,000 on January 1, 2019. Janes estimated the remaining useful life of the
patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $480,000 when Lou sold it to
Janes.
b. During 2021, a franchise was purchased from the Rink Company for $630,000. The contractual life of the franchise is 10 years and
Janes records a full year of amortization in the year of purchase.
c. Janes incurred research and development costs in 2021 as follows:
Materials and supplies.
Personnel
Indirect costs
Total
d. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased
from Lou is only five more years.
$153,000
193,000
73,000
$419,000
Required:
1. Prepare the entries necessary for years 2019 through 2021 to reflect the above…
Exercise 11-19 (Algo) Amortization [LO11-4, 11-5]
Janes Company provided the following information on intangible assets:
a. A patent was purchased from the Lou Company for $1,400,000 on January 1, 2019. Janes estimated the remaining useful life of the
patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $490,000 when Lou sold it to
Janes.
b. During 2021, a franchise was purchased from the Rink Company for $640,000. The contractual life of the franchise is 10 years and
Janes records a full year of amortization in the year of purchase.
C. Janes incurred research and development costs in 2021 as follows:
Materials and supplies
$154,000
194,000
74,000
Personne1
Indirect costs
Total
$422,000
d. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased
from Lou is only five more years.
Required:
1. Prepare the entries necessary for years 2019 through 2021 to reflect the above…
4 Bella Inc. has invested in a piece of land on January 1, 2022.
The company uses the revaluation model for its land, and the revaluation takes place annually.
5
6
7
More information about the land acquisition cost and fair values is provided below:
8 January 1, 2022
Acquisition cost
519000 paid for in cash
9 December 31, 2022
Fair value
532000
10 December 31, 2023
Fair value
535000
Fair value
529000
11 December 31, 2024
12
13 During June 2025, the company sold the land for
14
0
1
2
3
15 Required
16 Prepare all journal entries related to the land from January 1, 2022 to June 2025, assuming the asset adjustment method is used.
17
18 Enter your answer here:
9
534000
45
Chapter 11 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
Ch. 11 - Prob. 11.1QCh. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9QCh. 11 - Prob. 11.10Q
Ch. 11 - Briefly explain the differences and similarities...Ch. 11 - Prob. 11.12QCh. 11 - Prob. 11.13QCh. 11 - What are some of the simplifying conventions a...Ch. 11 - Explain the accounting treatment required when a...Ch. 11 - Explain the accounting treatment and disclosures...Ch. 11 - Explain the steps required to correct an error in...Ch. 11 - Prob. 11.18QCh. 11 - Prob. 11.19QCh. 11 - Prob. 11.20QCh. 11 - Prob. 11.21QCh. 11 - Briefly explain the differences between U.S. GAAP...Ch. 11 - Under U.S. GAAP, litigation costs to successfully...Ch. 11 - Cost allocation At the beginning of its fiscal...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Depreciation methods; partial periods LO112 Refer...Ch. 11 - Prob. 11.4BECh. 11 - Prob. 11.5BECh. 11 - Prob. 11.6BECh. 11 - Group depreciation; disposal LO112 Mondale Winery...Ch. 11 - Prob. 11.8BECh. 11 - Prob. 11.9BECh. 11 - Prob. 11.10BECh. 11 - Change in principle; change in depreciation method...Ch. 11 - Prob. 11.12BECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.14BECh. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - Prob. 11.16BECh. 11 - Prob. 11.17BECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Subsequent expenditures LO119 Demmert...Ch. 11 - Depreciation methods LO112 On January 1, 2018,...Ch. 11 - Prob. 11.2ECh. 11 - Depreciation methods; partial periods LO112 [This...Ch. 11 - Depreciation methods; asset addition; partial...Ch. 11 - Depreciation methods; solving for unknowns LO112...Ch. 11 - Depreciation methods; partial periods LO112 On...Ch. 11 - Prob. 11.7ECh. 11 - IFRS; depreciation; partial periods LO112, LO1110...Ch. 11 - IFRS; revaluation of machinery; depreciation;...Ch. 11 - Disposal of property, plant, and equipment LO112...Ch. 11 - Disposal of property, plant, and equipment;...Ch. 11 - Depreciation methods; disposal; partial periods ...Ch. 11 - Group depreciation LO112 Highsmith Rental Company...Ch. 11 - Double-declining-balance method; switch to...Ch. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Cost of a natural resource; depletion and...Ch. 11 - Prob. 11.18ECh. 11 - Prob. 11.19ECh. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Change in estimate; useful life and residual value...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Change in principle; change in depreciation...Ch. 11 - Prob. 11.25ECh. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - IFRS; impairment; property, plant, and equipment ...Ch. 11 - IFRS; Impairment; property, plant, and equipment ...Ch. 11 - Impairment; property, plant, and equipment LO118...Ch. 11 - Prob. 11.30ECh. 11 - IFRS; impairment; goodwill LO1110 IFRS Refer to...Ch. 11 - Prob. 11.32ECh. 11 - FASB codification research LO118 The FASB...Ch. 11 - Prob. 11.34ECh. 11 - Subsequent expenditures LO119 Belltone Company...Ch. 11 - Prob. 11.36ECh. 11 - Concept s; terminology LO111 through LO116, LO118...Ch. 11 - Retirement and replacement depreciation Appendix...Ch. 11 - Depreciation methods; change in methods LO112,...Ch. 11 - Prob. 11.2PCh. 11 - Depreciation methods; partial periods Chapters 10...Ch. 11 - Partial- year depreciation; asset addition;...Ch. 11 - Prob. 11.5PCh. 11 - Prob. 11.6PCh. 11 - Prob. 11.7PCh. 11 - Prob. 11.8PCh. 11 - Straight-line depreciation; disposal; partial...Ch. 11 - Prob. 11.10PCh. 11 - Prob. 11.11PCh. 11 - Prob. 11.12PCh. 11 - Depreciation and depletion; change in useful life;...Ch. 11 - Analysis Case 111 Depreciation, depletion, and...Ch. 11 - Communication Case 112 Depreciation LO111 At a...Ch. 11 - Judgment Case 113 Straight-line method; composite...Ch. 11 - Prob. 11.4BYPCh. 11 - Prob. 11.5BYPCh. 11 - Prob. 11.7BYPCh. 11 - Prob. 11.8BYPCh. 11 - Research Case 119 FASB codification; locate and...Ch. 11 - Ethics Case 1110 Asset impairment LO118 At the...Ch. 11 - Prob. 11.11BYPCh. 11 - Prob. 11.13BYPCh. 11 - Real World Case 1114 Disposition and depreciation;...Ch. 11 - Real World Case 1115 Depreciation and depletion...Ch. 11 - Prob. 11.16BYPCh. 11 - Target Case LO112, LO118, LO119 Target...
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