FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Determining Carrying Value and Amortization of Intangible Assets
Review the following information pertaining to Denzel Company.
A patent was purchased on January 2, 2018, for $149,500 when the remaining legal life was 16 years. On January 2, 2020, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition.
On January 1, 2020, Denzel Company purchased a second patent for $184,000 cash. At January 1, 2020, 6 years of the patent's legal life of 20 years had already expired.
On June 30, 2020, Denzel Company paid a firm $18,400 for a new trademark. Denzel considers the life of the trademark to be indefinite.
On November 1, 2020, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $276,000. Denzel determined that the fair value of the identfiable net assets acquired in the transaction is $269,100.
Note: When answering the following questions, do not round until your…
Amortization Entries
Kleen Company acquired patent rights on January 10 of Year 1 for $2,800,000. The patent has a useful life equal to its legal life of eight years. On
January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $38,000.
a. Determine the patent amortization expense for Year 4 ended December 31.
134,000 x
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V Check My Work
For intangible assets with finite lives, a company uses the straight-line method to calculate amortization. If a company successfully defends a
patent it becomes part of the cost of the patent. If the company loses a lawsuit regarding a patent infringement, then the patent is written off.
b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank.
Amortization Expense-Patents
2,125 X
Patents
2,125
X
FIXED ASSET 4
On July 1, 2019, PT ABC purchased a copyright of tutorial application for $400,000. It is estimated that the copyright will have a useful life of 8 years without residual value.
Instruction:
a. Journalize amortization expense for 2019 using straight line method.
b. What is the balance of Copyrights on balance sheet of December 31, 2020?
Chapter 8 Solutions
FINANCIAL ACCT-CONNECT
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Straight-line depreciation P1 On January 2, 2016,...Ch. 8 - Prob. 4QSCh. 8 - Computing revised depreciation C2 On January 2,...Ch. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Partial-year depreciation; disposal of plant asset...Ch. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - A Exchanging assets P5 Gilly Construction trades...Ch. 8 - Recording plant asset disposals P2 P5 On January...Ch. 8 - Prob. 25ECh. 8 - Plant asset costs; depreciation methods C1 P1...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Asset cost allocation; straight-line depreciation...Ch. 8 - Computing and revising depreciation; revenue and...Ch. 8 - Computing and revising depreciation; selling plant...Ch. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Teams are to select an industry, and each team...Ch. 8 - Prob. 5BTNCh. 8 - Prob. 7BTNCh. 8 - Prob. 9BTN
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