CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
41st Edition
ISBN: 9781337389518
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 17, Problem 39P
To determine
Identify the amount and characters of Company L recognize on the disposition of the patent, and write a letter to Company L, regarding discussing the treatment of gain.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
6.In Jan of 2018, Entity D purchased a patent at a cost of P200,000. Legal and filing fees of P50,000 were paid to acquire the patent. The entity estimated a 10-year useful life for the patent and uses the straight line amortization method for all intangible assets. In 2021, the entity spent P40,000 in legal fees for an unsuccessful defense of the patent. The amount charged to income (expense and loss) in 2021 related to the patent should be:
Presented below is selected information for Sandhill Company.
Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.)
(a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in
2017?
Amount to be reported
$
(b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on Carla
Vista's books on January 1, 2016, was $238,00O. The franchise agreement had an estimated useful life of 10 years. Because Sandhill
must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount
should be amortized for the year ended December 31, 2017?
Amount to be amortized
$
%24
(Intangible Amortization) The following is selected information for Alatorre Company.1. Alatorre purchased a patent from Vania Co. for $1,000,000 on January 1, 2015. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2025. During 2017, Alatorre determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2017?2. Alatorre bought a franchise from Alexander Co. on January 1, 2016, for $400,000. The carrying amount of the franchise on Alexander’s books on January 1, 2016, was $500,000. The franchise agreement had an estimated useful life of 30 years. Because Alatorre must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017?3. On January 1, 2017,…
Chapter 17 Solutions
CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
Ch. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - A depreciable business dump truck has been owned...Ch. 17 - Prob. 10DQCh. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQ
Ch. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Prob. 17DQCh. 17 - Prob. 18DQCh. 17 - Prob. 19DQCh. 17 - Prob. 20DQCh. 17 - Prob. 21CECh. 17 - Prob. 22CECh. 17 - Prob. 23CECh. 17 - Prob. 24CECh. 17 - Prob. 25CECh. 17 - Prob. 26CECh. 17 - Prob. 27CECh. 17 - Prob. 28CECh. 17 - Prob. 29CECh. 17 - Prob. 30CECh. 17 - Prob. 31PCh. 17 - Prob. 32PCh. 17 - LO.2 A sculpture that Korliss Kane held for...Ch. 17 - Prob. 34PCh. 17 - Prob. 35PCh. 17 - Prob. 36PCh. 17 - Prob. 37PCh. 17 - Prob. 38PCh. 17 - Prob. 39PCh. 17 - Prob. 40PCh. 17 - Prob. 41PCh. 17 - Prob. 43PCh. 17 - Joanne is in the 24% tax bracket and owns...Ch. 17 - Prob. 45PCh. 17 - Prob. 46PCh. 17 - Prob. 47PCh. 17 - Prob. 48PCh. 17 - Prob. 49PCh. 17 - Prob. 50PCh. 17 - Prob. 51PCh. 17 - Prob. 52PCh. 17 - Prob. 53PCh. 17 - Prob. 54PCh. 17 - Jay sold three items of business equipment for a...Ch. 17 - Prob. 1RPCh. 17 - Prob. 2RPCh. 17 - Prob. 3RPCh. 17 - Prob. 4RPCh. 17 - Prob. 1CPACh. 17 - Prob. 2CPACh. 17 - Jerry uses a building for business purposes. The...Ch. 17 - Prob. 4CPACh. 17 - Prob. 5CPACh. 17 - Prob. 6CPACh. 17 - Wally, Inc., sold the following three personal...Ch. 17 - Net Section 1231 losses are: a. Deducted as a...Ch. 17 - Prob. 9CPACh. 17 - Prob. 10CPA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.arrow_forwardOn January 1, 2008, Ryan Company purchased a patent for P7,140,000. The patent is being amortized over its remaining legal life of 15 years expiring on January 1, 2023. During 2011, Ryan determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. Question: What amount should be reported in the statement of financial position for the patent, net of accumulated amortization, on December 31, 2011?arrow_forwardOn September 30, 2014, Leeds LTD. acquired a patent in conjunction with the purchase of another company. The patent, valued at $6 million, was estimated to have a 10-year life and no residual value. Leeds uses the straight-line method of amortization for intangible assets. At the beginning of January 2016, Leeds successfully defended its patent against infringement. Litigation costs totaled $500,000. Required: 1. Calculate amortization of the patent for 2014 and 2015. 2. Prepare the journal entry to record the 2016 litigation costs. 3. Calculate amortization for 2016. 4. Repeat requirements 2 and 3 assuming that Leeds prepares its financial statements according to IFRS.arrow_forward
- In January 1, 2015, Fun company purchased Company A for $40,000 in cash and paid immediately. Fun company assumed all of Company A's assets and assumed Company A's liabilities. company A has assets valued at $60,000 and liabilities valued at $50,000. question:suppose fun company estimates that company A will only be useful to them for 10 years. What is the annual amortization expense for the goodwill of company Z?arrow_forwardKlaus, Inc. has the ff. information regarding their intangible assets. Klaus spent P2,600,000 of experimental and development costs in its laboratory to develop a patent which was granted on January 2, 2018. Legal fees and other costs associated with the registration of the patent totaled P544,000. Klaus estimates that the useful life of the patent will be 8 years. Klaus purchased a trademark from Nikolai Co. for P1,280,000 on July 1, 2015. The trademark was successfully defended for a total cost of P326,400 which were paid on July 1, 2017. Klaus estimates that the useful life of the trademark will be 20 years from the date of acquisition. Klaus signed an agreement on January 1, 2018, to operate as a franchise of Chooks to Go. For an initial franchise fee of P3,000,000. Of this amount, P600,000 was paid when the agreement was signed and the balance is payable in 4 annual installments of P600,000 each, beginning January 1, 2019. The downpayment is nonrefundable and no future services…arrow_forwardDazzle Corporation purchased a patent for P7,140,000 on January 2014. The patent is being amortized over the remaining legal life of 15 years expiring on January 2029. During 2017, Dazzle Corporation determined that the economic benefits of the patent would not last longer than ten years from the date of acquisition. Using the same information on number (33), what amount should be charged to patent amortization expenses for the year ended December 31, 2017, assuming there is no change in the patent's useful life? OP816,000 O P476,000 O None of the above OP571.200 OP4,896,000arrow_forward
- V4. 3. Vaden Company purchased a patent from Williams Co. for $260,000 on January 1, 2016 when there was 15 years remaining in the legal life of the patent. Vaden estimates that the useful life of the patent will be 10 years from the date of acquisition. Expenditures of $25,000 for successful litigation in defense of the patent were paid on January 1, 2022. Required: a. Compute the carrying value of the patent at December 31, 2022. b. At the beginning of 2023, new market research indicates that the fair value of the patent is $90,000. Estimated future cash flows from the patent are $94,000 on January 1, 2023. Determine if the patent is impaired and, if so, prepare the journal entry necessary.arrow_forward2. JPIA Company spent P1, 920, 000 in acquiring a patent on January 3, 2016. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. At the beginning of 2018, the company paid P240, 000 for legal fees in a successful defense of the patent. On July 1, 2022, a competitor obtained rights to a patent which made JPIA's patent obsolete. How much is the loss from the patent obsolescence?arrow_forwardBelkin Plc purchased a patent for $135,000 on September 1, 2016. It had a useful life of 10 years. On January 1, 2018, Belkin spent $33,000 to successfully defend the patent in a lawsuit. Belkin feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2018?arrow_forward
- On September 30, 2014, Leeds LTD, acquired a potent in conjunction with the purchase of another company. The potent, valued at $6 million, was estimated to have a 10-year life and no residual value. Leeds user the straight-line method of amortization for intangible assets. At the beginning of January 2016, Leeds successfully defended its patent against infringement. Litigation costs totaled $500,000. Requireal: 1. Calculate amortization of the potent for 2014 and 2015. 2. Prepare the journal entry to record the 2016 litigation costs. 3. Calculate amortization for 2016. Repeat requirements 2 and 3 assuming that Leeds prepares its financial statements according to IFRS.arrow_forwardIn January 2014, the Jennifer Corporation purchased a patent for $231,000 from Travis Company that had a remaining legal life of 14 years. Jennifer estimated that the remaining economic life would be seven years. In January 2018, the company incurred $30,000 in legal costs to defend the patent from an infringement. Jennifer's lawyers were successful, and the remaining years of benefit from the patent were estimated to be six years. What is the patent amortization expense for 2018? $9,923 $21,500 $7,615 $16,500arrow_forwardBennet Co. bought a trademark from Bonnet, Inc. on January 2, 2018, for $1,200,000. An independent research company estimated that the remaining useful life of the trademark was 10 years. Its unamortized cost on Bonnet’s books was $900,000. In Bennet’s 2018 income statement, what amount should be reported as amortization expense?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning