(a) A patent that was acquired for $800,000 at the beginning of the current year expires in 20 years and is expected to have a useful life of 5 years. Present the adjusting entry to amortize the patent for the current year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Debit Credit Account Titles and Explanation
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- A patent that was acquired for $1,680,000 at the beginning of the current year expires in 20 years and is expected to have a useful life of 5 years. Present the adjusting entry to amortize the patent for the current year. (Credit account titles are automatically indented when the 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 CreditSheffield Corp. purchases a patent for $315,000 on January 2, 2022. Its estimated useful life is 18 years. (a) Prepare the journal entry to record amortization expense for the first year. (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 O for the amounts.) Account Titles and Explanation Debit Credit eTextbook and MediaOn January 2, 2021, Kerwin Company purchased a patent for $48,000. The patent has an estimated useful life of 25 years and a 20- year legal life. What entry would the company make at December 31, 2021 to record amortization expense on the patent? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation amortization expense Debit 2,400 Credit accumulated amortization 2,400
- Sandhill Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2019, the company expends $324,500 on a research project, but by the end of 2019 it is impossible to determine whether any benefit will be derived from it. (b) Your answer is correct. The project is completed in 2020, and a successful patent is obtained. The R&D costs to complete the project are $114,500. The administrative and legal expenses incurred in obtaining patent number 472-1001-84 in 2020 total $17,250. The patent has an expected useful life of 5 years. Record these costs in journal entry form. Also, record patent amortization (full year) in 2020. (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 O for the amounts.) Account Titles and Explanation Debit Credit Research and Development Expense 114500 Cash 114500 (To record research and…On January 2, 2021, Kerwin Company purchased a patent for $48,000. The patent has an estimated useful life of 25 years and a 20- year legal life. What entry would the company make at December 31, 2021 to record amortization expense on the patent? (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit CreditOn January 2, 2021, Concord Company purchased a patent for $390,000. The patent has an 6-year estimated useful life and a legal life of 20 years.Prepare the journal entry to record patent amortization. (Credit account titles are automaticallyindented when the amount is entered. Do not indent manually. List all debit entries before credit entries
- (b) On June 1, 2023, Bramble spent $8,120 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2023. Prepare all journal entries required in 2023 and 2024. (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 O for the amounts. List all debit entries before credit entries. Record entries in the order displayed in the problem statement.) Date Account Titles and Explanation (To record cost of infringement suit) (To record amortization expense) Debit CreditOn June 1, 2023, Culver spent $9,720 to successfully prosecute a patent infringement suit. As a result, the estimate of useful life was extended to 12 years from June 1, 2023. Prepare all journal entries required in 2023 and 2024. (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 o for the amounts. List all debit entries before credit entries. Record entries in the order displayed in the problem statement.) Date Account Titles and Explanation (To record cost of infringement suit) (To record amortization expense) Debit CreditDuring 2016, Martinez Corporation spent $155,520 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $28,080 related to the patent were incurred as of October 1, 2016. (a) Your answer is correct. Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2016 Research and Development Expense 155520 Cash 155520 (To record research and development expenses) 2016 Patents 28080 Cash 28080 (To record legal expenses)
- At the end of 2023, Novak Corporation owns a licence with a carrying amount of $508,000. Novak expects undiscounted future cash flows from this licence to total $512,500. The licence's fair value is $404,000 and disposal costs are estimated to be nil. The licence's discounted cash flows (that is, value in use) are estimated to be $458,000. Assume that the licence was granted in perpetuity and has an indefinite life, and that Novak prepares financial statements in accordance with ASPE. Assume that the licence was granted in perpetuity and has an indefinite life. Determine if the licence is impaired at the end of 2023. The licence Prepare any related entry that is necessary. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) at the end of 2023. Account Titles and Explanation eTextbook and Media List of…Pharoah Company purchases a patent for $146,000 cash on January 2, 2024. Its legal life is 20 years and its estimated useful life is 8 years. (a) Record the purchase of the patent on January 2, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles Jan. 2 Debit Credit List of AccountsTaylor Swift Corporation purchases a patent from Salmon Company on January 1, 2025, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2025 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 o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Patents cash (To record purchase of patents) Amortization Expense Patents (To record amortization of patents) Debit 24,000 8400 Credit 24,000 24,000