Prepare journal entries to record the transactions above. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)

Prepare journal entries to record the transactions above. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts)

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
The intangible assets section of Novak Corporation's balance sheet at December 31, 2025, is presented here. Patents ($78,000 cost less $7,800 amortization) Copyrights ($46,800 cost less $32,760 amortization) Total $70,200 14,040 $84,240 The patent was acquired in January 2025 and has a useful life of 10 years. The copyright was acquired in January 2019 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2026. Jan. 2 Jan.-June Sept. 1 Oct. 1 Paid $60,840 legal costs to successfully defend the patent against infringement by another company. Developed a new product, incurring $299,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $26,400. Paid $52,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October. Acquired a copyright for…
The intangible assets section of Ayayai Company at December 31, 2022, is presented here. Patents ($83,000 cost less $8,300 amortization) $74,700 Franchises ($54,600 cost less $21,840 amortization) 32,760 Total $107,460 The patent was acquired in January 2022 and has a useful life of 10 years. The franchise was acquired in January 2019 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2023. Jan. 2 Paid $35,100 legal costs to successfully defend the patent against infringement by another company. Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials aired in September and October. Oct. 1 Acquired a franchise for $141,400. The franchise has a useful life of 50 years. Nov.–Dec. Developed a new product, incurring $135,000 in research and development costs during December. A patent was granted for…
Barb Company has provided information on intangible assets as follows:1. A patent was purchased from Lou Company for $1,500,000 on January1, 2018. Barb estimated the remaining useful life of the patent to be 10years. The patent was carried in Lou's accounting records at a net bookvalue of $1,250,000 when Lou sold it to Barb. 2. During 2019, a franchise was purchased from Rink Company for$500,000. In addition, 5% of revenue from the franchise must be paid toRink. Revenue from the franchise for 2019 was $2,000,000. Barbestimates the useful life of the franchise to be 10 years and takes a fullyear's amortization in the year of purchase. 3. Barb incurred R&D costs in 2019 as follows. Materials and equipmentPersonnelIndirect costs $120,000140,00060,000 $320,000 Barb estimates that these costs will be recouped by December 31, 2020. 4. On January 1, 2019, Barb estimates, based on new events, that theremaining life of the patent purchased on January 1, 2018, is only 5 yearsfrom…
The intangible assets section of Pina Corporation’s balance sheet at December 31, 2022, is presented here. Patents ($73,300 cost less $6,900 amortization) $66,400 Copyrights ($57,000 cost less $46,700 amortization) 10,300 Total $76,700 The patent was acquired in January 2022 and has a useful life of 10 years. The copyright was acquired in January 2016 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2023. Jan. 2 Paid $54,000 legal costs to successfully defend the patent against infringement by another company. Jan.– June Developed a new product, incurring $241,500 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $20,000. Sept. 1 Paid $68,000 to a quarterback to appear in commercials advertising the company’s products. The commercials will air in September and…
Carla Vista Company, organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025. 1/2/25 Purchased patent (9-year life) Purchase goodwill (indefinite life) Purchased franchise with 10-year life; expiration date 7/1/35 4/1/25 7/1/25 8/1/25 Payment of copyright (5-year life) 9/1/25 Research and development costs $394,200 348,000 428,000 153,600 218,000 $1,541,800
Pharoah Company, organized in 2022, has the following transactions related to intangible assets. 1/2/22 Purchased patent (7-year life) $605,500 4/1/22 Goodwill purchased (indefinite life) 360,000 7/1/22 Acquired 10-year franchise; expiration date 7/1/2032 600,000 9/1/22 Incurred research and development costs 182,000 (a1) Prepare the necessary entries to record these transactions. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. 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
Cheyenne Corp., organized in 2020, has the following transactions related to intangible assets. 1/2/20 Purchased patent (6-year life) $516,000 4/1/20 Goodwill purchased (indefinite life) 360,000 7/1/20 10-year franchise; expiration date 7/1/2030 380,000 9/1/20 Research and development costs 166,000 Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter…
Wildhorse Company has provided information on intangible assets as follows.A patent was purchased from Windsor Company for $1,700,000 on January 1, 2019. Wildhorse estimated the remaining useful life of the patent to be 10 years. The patent was carried in Windsor’s accounting records at a net book value of $1,700,000 when Windsor sold it to Wildhorse.During 2020, a franchise was purchased from Novak Company for $460,000. In addition, 5% of revenue from the franchise must be paid to Novak. Revenue from the franchise for 2020 was $2,530,000. Wildhorse estimates the useful life of the franchise to be 10 years and takes a full year’s amortization in the year of purchase.Wildhorse incurred research and development costs in 2020 as follows. Materials and equipment $153,000 Personnel 204,000 Indirect costs 108,000 $465,000 Wildhorse estimates that these costs will be recouped by December 31, 2023. The materials and equipment purchased have no alternative…
Marshall Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) $ 350,000 4/1/20 Purchase goodwill (indefinite life) 360,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 450,000 8/1/20 Payment of copyright (5-year life) 156,000 9/1/20 Research and development costs 215,000 $1,531,000 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2020, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
Barb Company has provided information on intangible assets as follows:1. A patent was purchased from Lou Company for $1,500,000 on January 1, 2018. Barb estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou’s accounting records at a net book value of $1,250,000 when Lou sold it to Barb.2. During 2019, a franchise was purchased from Rink Company for $500,000. In addition, 5% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,000,000. Barb estimates the useful life of the franchise to be 10 years and takes a full year’samortization in the year of purchase.3. Barb incurred R&D costs in 2019 as follows.