Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2016, and a payment of $35,000 was made to obtain a copyright. Gansac expects to sell 200,000 books evenly between 2016 and 2020 at a price of $10 per book. Prepare journal entries to record the events related to the copyright and sales of the book during 2016 and 2017, assuming that sales were as projected.

Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2016, and a payment of $35,000 was made to obtain a copyright. Gansac expects to sell 200,000 books evenly between 2016 and 2020 at a price of $10 per book. Prepare journal entries to record the events related to the copyright and sales of the book during 2016 and 2017, assuming that sales were as projected.

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

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3MC: During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of...

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During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of cocoa beans at 1.00 per pound, delivery to be made in the spring of 2020. Because a record harvest is predicted for 2020, the price per pound for cocoa beans had fallen to 0.80 by December 31, 2019. Of the following journal entries, the one that would properly reflect in 2019 the effect of the commitment of R Corp. to purchase the 100,000 pounds of cocoa is:
Dream Big Pillow Co. pays 65% of its purchases in the month of purchase, 30% the month after the purchase, and 5% in the second month following the purchase. It made the following purchases at the end of 2017 and the beginning of 2018:
To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants under formal contracts, provided that they use it to renovate their store space. On November 1, 2017, the company loaned $102,000 to a new tenant on a one-year note with a stated annual interest rate of 10 percent. Interest is to be received by Marketplace Mall on April 30, 2018, and at maturity on October 31, 2018. Required: Prepare journal entries that Marketplace Mall would record related to this note on the following dates: (a) November 1, 2017; (b) December 31, 2017 (Marketplace Mall’s fiscal year-end); (c) April 30, 2018; and (d) October 31, 2018. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
On January 1, 2016, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $25,000 each, and will be paid on December 31, 2016, 2017, and 2018. The last three are to be $40,000 each and will be paid on December 31, 2019, 2020, and 2021. Montgomery borrowed other money at a 10% annual rate. Required: 1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2016? 2. How much interest expense on this note will Montgomery recognize in 2016?
To attract retailers to its shopping center, the Marketplace Mall will lend money to tenants underformal contracts, provided that they use it to renovate their store space. On November 1, 2014, thecompany loaned $100,000 to a new tenant on a one-year note with a stated annual interest rate of9 percent. Interest is to be received by Marketplace Mall on April 30, 2015, and at maturity onOctober 31, 2015.Required:Prepare journal entries that Marketplace Mall would record related to this note on the following dates: ( a ) November 1, 2014; ( b ) December 31, 2014 (Marketplace Mall’s fiscal year-end);( c ) April 30, 2015; and ( d ) October 31, 2015.
On June 1, 2017, Mills Company sells $200,000 of shelving units to a local retailer, ShopBarb, which is planning to expand its stores in the area. Under the agreement, ShopBarb asks Mills to retain the shelving units at its factory until the new stores are ready for installation. Title passes to ShopBarb at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2017, and ShopBarb pays in full. Prepare the journal entries for this bill-and-hold arrangement (assuming that conditions for recognizing the sale as a bill-and-hold sale have been met) for Mills on June 1 and September 1, 2017. The cost of the shelving units to Mills is $110,000.
Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2019, and a payment of $35,000 was made to obtain a copyright. Gansac expects to sell 200,000 books evenly between 2019 and 2023 at a price of $10 per book. Required: 1. Prepare journal entries to record the events related to the copyright and sales of the book during 2019 and 2020, assuming that sales were as projected. 2. Next Level How would your answer change if Gansac expected sales of the book to be 110,000 copies in 2019, 70,000 copies in 2020, and 20,000 copies over the remainder of the copyright’s useful life?
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.
On January 1 2017, George Company purchased a new building. George paid $25,000 as a down payment and issued a long-term note to finance the balance. The note, which carries an interest rate of 4%, requires George to make annual payments of $55,000 for six years, with the first payment due on December 31, 2017. How would I find out what amount George should record as the cost of the new building ?
On January 4, 2016, Franc Company purchased for $30,000 a patent that had been filed 8 years earlier. The patent covers a manufacturing process that the company plans to use for 15 years. On January 3, 2017, the company paid its lawyers $11,000 for successfully defending the patent in a lawsuit how to calculate amotization
On June 1, 2020, Vaughn Company sells $193,000 of shelving units to a local retailer, ShopBarb, which is planning to expand its stores in the area. Under the agreement, ShopBarb asks Vaughn to retain the shelving units at its factory until the new stores are ready for installation. Title passes to ShopBarb at the time the agreement is signed. The shelving units are delivered to the stores on September 1, 2020, and ShopBarb pays in full. Prepare the journal entries
The financial controller of McEwan Limited, a publishing company, noted thefollowing two items in a report to the finance director on the preliminary accountsfor the year ended December 31, 2021:• A copyright for a novel originally purchased for $100,000 in 2018 was beingamortized over ten years with an expected residual value of $10,000. However,due to poor sales and a scandal earlier this year involving the author, it is nowexpected that the book will only be commercially viable for another year and thecopyright will have no residual value.• An insurance premium of $1,500 was paid on November 1, 2020, for a one-yearpolicy. The payment was recorded as a debit to insurance expense in 2020.Required:a. Discuss the appropriate accounting treatment for two changes above.b. Assuming the books are closed for 2020 and open for 2021, provide the journalentries required to address the two changes. Ignore income tax effects. Show allworkings