On January 3, 2018, Sweet company bought a patent for P540,000. The estimated useful life of the patent is 8 years. During the year 2021, the company determined that the economic life of the patent is only 6 years from the date of acquisition. How much is the amortization expense for year 2021?

On January 3, 2018, Sweet company bought a patent for P540,000. The estimated useful life of the patent is 8 years. During the year 2021, the company determined that the economic life of the patent is only 6 years from the date of acquisition. How much is the amortization expense for year 2021?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 9PA: For each of the following unrelated situations, calculate the annual amortization expense and...

See similar textbooks

Related questions

Q: Assets and liabilities of a company are $150,000 and $30,000, respectively. Determine stockholders'…

A: Basic accounting equation is Total assets = Total liabilities + Stockholders equity

Q: Use the Tax Rate Tables, Exhibit 18-3, to calculate the tax liability (in $) for the taxpayer. Name…

A: Tax liability: Tax obligation refers to the amount of money that is owing to a federal, state, or…

Q: On January 1, 2006, Ward Company issued its 9% bonds in face amount of P4,000,000, which mature on…

A: The bonds are issued at discount when market rate is higher than the coupon rate of bonds payable.

Q: Straight Line depreciation of Furniture & Equipment for the month is calculated using the annual…

A: The calculation of Straight line rate (%) and the adjusting entry to reflect amortisation of…

Q: What journal entry should be made to reflect the issuance of a $3,000 note to a creditor who has…

A: The issue is a journal entry that records the issuing of a $3,000 note to a customer. creditor who…

Q: Sales (65000 units) 15,600,000 Variable cost 8,736,000 Contribution Margin 6,864,000 Fixed Costs…

A: Degree of Operating Leverage: The degree of operating leverage (DOL) is a measure used to evaluate…

Q: How much unrealized holding gain should Lover report in profit or loss for the year 2022?

A: The calculation of unrealised holding gain that should be reported in profit or loss for the year…

Q: Required information [The following information applies to the questions displayed below.] Julio and…

A: Ordinary income is any type of income earned by an organization or an individual that is taxable at…

Q: Able Company had the following amounts of long-term, debt outstanding at December 31, 2021: 14%…

A: Long term debt is that form of debt which needs to be paid out in long run, that is after one year's…

Q: SportsWorld purchased equipment costing $10,000. The equipment has a residual value of $1,000, and…

A: Introduction: Depreciation is acknowledged as an estimate of asset consumption in several GAAPs but…

Q: e sheet ment of cash flows e statement

A: The summary of cash receipts and cash payments are provided by cash flow statement. A cash flow…

Q: Suppose that today's price of ABC stock is $100 and it is known that price moves up or down by a…

A: Given here annual variance of the underlying stock prices is 36%, Volatality is square root…

Q: Current Attempt in Progress Blossom Industries incurs unit costs of $7 ($4 variable and $3 foxed) in…

A: Marginal cost is the cost of producing one additional unit of output.

Q: Given is the Trial Balance of ABC Corporation for the period ending December 31, 2020: ABC…

A: A 10-column worksheet is a columnar template that helps accountants and bookkeepers plan and…

Q: c. The partners agreed to share income according to the ratio of their original investments.…

A: Here discuss about the details of the distribution profit in the partnership in the basis of the…

Q: Describe the four sources of funds for a business.

A: Funding or funds is the term which is defined as the act of providing the resources to finance a…

Q: On 1.1.2016 the management of ANDY Bhd granted its 100 employees in the production units options to…

A: As per IFRS 102, Share-based Payment, the shares options granted to the employees for the services…

Q: The Ivanhoe Acres Inn is trying to determine its break-even point during its off-peak season. The…

A: A break-even point is a situation in which the company's total cost is equal to total revenue and…

Q: estimated disposal cost of P50,000. On January 10, 2022, the asse cost to sell amounting to P35,000.…

A: In case of non-current assets, classified as held for sale the value of assets would be recorded as…

Q: The following are the selected account balances of ABC Company taken from its trial balance as of…

A: Net Realizable value of accounts receivable = Accounts receivable - Ending Allowance for Bad debts…

Q: Beam Company, which is planning to spend P135,000 for a new machine, to be depreciated on a straight…

A: Payback period is the number of periods within which the investment on a project can be recovered in…

Q: Smart Company incurred the following costs in 2021, in relation to developing a machine that will be…

A: R & D expenses are related to amount spent on reasearch and development to introduce new…

Q: Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and…

A: Calculation of predetermined Variable overhead rate :-

Q: 9. $177,400 $106,440 10. $2,330,000 11. $342,900 $264,033 Level 2 Chapter 18- Section II - Exercise…

Q: PAGE 5 Estimated selling price 6,000,000 Cost to complete 700,000 Cost to sell 800,000 Normal profit…

A: Measurement of inventory is should be based on following:- 1) If net realisable value of finished…

Q: Which of the foll

A: National Internal revenue Code: It is a Tx Code of 1997 originated from Republic Act No. 8424,…

Q: 28. Which of the following must be known about a production process to institute a variable costing…

Q: tay in employment for three years. SURDIN estimated that 10% of these employees would leave the…

A: It is an employees compensation scheme of employees stock option plan by passing a resolution as per…

Q: 1. Journalize all the foregoing payroll transactions. 2. Prepare the pay slip of Alfonso Tianzon for…

A: Payroll transactions are those transactions which arises due to the employment of the employees by…

Q: At the beginning of the question-and-answer portion of the annual shareholder’s meeting of Kemper…

A: The following formulas are used for equity method of investments:- 1. Net Investment (before sale) =…

Q: Q1. AUSTERE Co. owns 20% of SEVERE, Inc.'s ordinary shares. SEVERE also has outstanding cumulative…

A: Answer:- Cumulative preference shares meaning:- Cumulative preference share are those shares which…

Q: 14.) How much is adjusted Allowance for Bad Debts on December 31, 2021? 15.) How much is adjusted…

A: Cotton's laundry services is expected to have adjusted Allowance for Bad Debts for the year .…

Q: considering the adjustment given below. adjustments 1. closing inventory / consumables as on…

A: The answer is stated below:

Q: are added after the Using the same data, inspection point, the inspection takes place when the units…

Q: Level production strategy is utilized to prepare the aggregate plan. Based on below Apr May…

A: Q 13. Demand Qty In April - 4000 Units Opening Inventory - 200 Unites Production needs to be done…

Q: On April 30, 2019 the Triple Safety Agency received an advance payment of P540,000 for a one-year…

A: Service income should be recognized as revenue when it is earned. Any advance received against which…

Q: Management accounting is a subset of cost accounting. Cost accounting is a subset of both management…

A: Accounting is the process in which transactions are recorded, summarised, posted and then the result…

Q: 10 11 12 13 14 B D H Part 2 Answer the following questions according to Table A and Annual Fixed…

A: Contribution margin is the excess of sales per unit over variable cost per unit.

Q: After realization and payment of external debt, how much cash would the partnership have left for…

Q: Statement 1: A revenue bill must originate from the House Representatives. tatement 2: A bill…

A: The origination clause also called the revenue clothes States the all tax bill must originate in the…

Q: f. The partners agreed to share income by paying salaries of $80,000 to Thomas and P56,000 to Lopez,…

Q: During the year 2021, Pal Company purchased 1,000 shares of Pak Company ordinary shares at P150 per…

A: As per Accounting provisions, A held for trading share is purchased with the intention of short…

Q: adjusted Accounts Receivable on December 31, 2021?

A: Person from whom amounts are due for goods sold or services rendered or in respect of contractual…

Q: Required: 1. Determine the balance of the investment account as it was kept by Jen Company. 2.…

A: Jen Company has made some transactions pertaining to long term investment in shares of Jisoo…

Q: For this same problem, I need help to journalize the adjusting entries. I also need assistance with…

A: An adjusting journal entry is an entry in a company's general ledger that occurs at the end of an…

Q: Alliance Corporation purchased inventory with an invoice price of $22,000 and credit terms of 1/10,…

A: Formula used: Discount amount = Invoice amount x Discount rate

Q: st P 60,000 idual value at the end of 5 year 10,000 of an annuity of P1 at 14% for 5 years 3.43 of P…

A: Present Value of Annual Saving =PV of Net Cash flow Annual Saving * (PV Annuity 14%, 5)= Cost - PV…

Q: Blank Slate Inc produces two types of tablet computers: a basic version and a high-end version.…

A: Under standard costing system, standards are fixed and the actual performance is compared with such…

Q: A plant bought a new equipment for P220,000 and used it for 10 years, the life span of the…

A: Depreciation is the expense which takes place due to fact of the use of the fixed asset during the…

Q: The owners’ equity account for Rantuil Utilities Berhad are shown below: Common Share (RM2 par) -…

A: Share dividend is declared by the company out of its retained earnings. On declaration and issue of…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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

For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.
On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
On January 3, 2018, Sweet company bought a patent for P540,000. The estimated useful life of the patent is 8 years. During the year 2021, the company determined that the economic life of the patent is only 6 years from the date of acquisition. 1.)How much is the amortization expense for year 2021? 2.)What is the carrying value of the patent at December 31, 2021?
On March 1, 2020, Tebow Company purchased a patent for $158,000 cash. Although the patent gives legal protection for 19 years, the patent will be used for only 2 years. Assume straight-line amortization. Amortization per unit (Cost Res. Value)/Time = Amortization per year Amortization per year X portion of year = Amortization Journalize a) the purchase of the patent, and b) the amortization expense of the patent as of December 31, 2020. Date a b Check All Parts Description Debit Credit
On January 1, 2016, Guava Co. bought a patent for P270,000. Amortization is being made over its remaining life of 10 years expiring on January 1, 2026. During 2020, Guava Co. estimated that the economic life of the patent will be 7 years from the date of acquisition. What amount should Guava Co. report as patent net of accumulated amortization in its December 31, 2020 balance sheet? * P1,600,000 P108,000 P54,000 P23,143 answer not given
In January of 2021, the Phillips Company purchased a patent at a cost of $100,000. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method. what the amount charged to amortization expense related to the patent for 2021 should be
During 2022, Brownie Company incurred research and development cost of P272,000 relating to the patent that was granted on July 1, 2022. Cost of registering the patent is P68,000. The patent legal life is 20 years. However, the management expected that the patent will be useful for 10 years only. On December 31, 2022, what amount should be reported as patent, net of accumulated amortization?
On January 1, 2018, Joel Company purchased a patent for P7,140,000. The patent is being amortized over its remaining legal life of 15 years. During 2021, Joel determined that the economic benefits of the patent would not last longer than 10 years from the date of acquisition. What should be reported in the statement of financial position as carrying amount of patent on December 31, 2021?
Presented below is selected information for Alatorre Company. 1. Alatorre purchased a patent from Vania Co. for $1,000,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, 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, 2020? 2. Alatorre bought a franchise from Alexander Co. on January 1, 2019, for $400,000. The carrying amount of the franchise on Alexander's books on January 1, 2020, was $400,000. The franchise agreement had an estimated useful life of 30 years. Because Alatorre must enter a competitive bidding at the end of 2021, it is unlikely that the franchise will be retained beyond 2028. What amount should be amortized for the year ended December 31, 2020? 3. On January 1, 2020, Alatorre incurred…
Vincenzo Company spent P200,000 on research and development cost for an invention during 2021. On January 1, 2022, the invention was patented at a total cost of P450,000 with and estimated legal life of the patent was 20 years and the estimated useful life was 10 years. In January 2022, Vincenzo paid P250,000 for legal fees in a successful defense of the patent. What should be the amortization expense for 2022?
Dazzle 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 OP4,896,000