College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 7CE
To determine
Journalize the transactions related to patent.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Rakko, Inc. acquired a patent on January 1 for $70,000 cash. The patent was estimated to have a
useful life of 14 years with no residual value.
Required:
Part a. Prepare the journal entry to record the acquisition of the patent on January 1.
Part b. Prepare the journal entry to record the annual amortization as of Dec 31.
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.
A. fill in the blank 1years
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
Chapter 18 Solutions
College Accounting, Chapters 1-27
Ch. 18 - Prob. 1TFCh. 18 - Prob. 2TFCh. 18 - Depreciation is a process of asset valuation; that...Ch. 18 - The straight-line method of depreciation allocates...Ch. 18 - Prob. 5TFCh. 18 - Prob. 1MCCh. 18 - Prob. 2MCCh. 18 - Prob. 3MCCh. 18 - Prob. 4MCCh. 18 - Prob. 5MC
Ch. 18 - The following costs were incurred to purchase a...Ch. 18 - Prob. 2CECh. 18 - A machine costing 350,000 has a salvage value of...Ch. 18 - Grandorf Company replaced the engine in a truck...Ch. 18 - Prepare journal entries for the following...Ch. 18 - Prob. 6CECh. 18 - Prob. 7CECh. 18 - Prob. 1RQCh. 18 - Prob. 2RQCh. 18 - Prob. 3RQCh. 18 - What is meant by the depreciable cost of a plant...Ch. 18 - Prob. 5RQCh. 18 - Prob. 6RQCh. 18 - Prob. 7RQCh. 18 - For assets acquired after 1986, but before...Ch. 18 - Prob. 9RQCh. 18 - Prob. 10RQCh. 18 - Prob. 11RQCh. 18 - Prob. 12RQCh. 18 - Prob. 13RQCh. 18 - Prob. 14RQCh. 18 - Prob. 15RQCh. 18 - Prob. 16RQCh. 18 - Prob. 17RQCh. 18 - Prob. 18RQCh. 18 - Prob. 19RQCh. 18 - Prob. 20RQCh. 18 - Prob. 21RQCh. 18 - Prob. 22RQCh. 18 - Prob. 23RQCh. 18 - Prob. 1SEACh. 18 - STRAIGHT-LINE, DECLINING-BALANCE, AND...Ch. 18 - UNITS-OF-PRODUCTION METHOD The truck purchased in...Ch. 18 - Prob. 4SEACh. 18 - JOURNAL ENTRIES: DISPOSITION OF PLANT ASSETS...Ch. 18 - Prob. 6SEACh. 18 - STRAIGHT-LINE, DECLINING-BALANCE,...Ch. 18 - UNITS-OF-PRODUCTION METHOD A machine is purchased...Ch. 18 - CALCULATING AND JOURNALIZING DEPRECIATION...Ch. 18 - IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE...Ch. 18 - DISPOSITION OF ASSETS: JOURNALIZING Mitchell Parts...Ch. 18 - DEPLETION: CALCULATING AND JOURNALIZING Mineral...Ch. 18 - INTANGIBLE LONG-TERM ASSETS Track Town Co. had the...Ch. 18 - Prob. 1SEBCh. 18 - STRAIGHT-LINE, DECLINING-BALANCE, AND...Ch. 18 - Prob. 3SEBCh. 18 - Prob. 4SEBCh. 18 - JOURNAL ENTRIES: DISPOSITION OF PLANT ASSETS...Ch. 18 - Prob. 6SEBCh. 18 - STRAIGHT-LINE, DECLINING-BALANCE,...Ch. 18 - UNITS-OF-PRODUCTION METHOD A machine is purchased...Ch. 18 - CALCULATING AND JOURNALIZING DEPRECIATION...Ch. 18 - IMPACT OF IMPROVEMENTS AND REPLACEMENTS ON THE...Ch. 18 - DISPOSITION OF ASSETS: JOURNALIZING Mayer Delivery...Ch. 18 - DEPLETION: CALCULATING AND JOURNALIZING Mining...Ch. 18 - Prob. 13SPBCh. 18 - Prob. 1MYWCh. 18 - Creative Solutions purchased a patent from Russell...Ch. 18 - On April 1, 20-3, Kwik Kopy Printing purchased a...Ch. 18 - Prob. 1CP
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
- 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.arrow_forwardThe 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.arrow_forwardA company purchased a patent for $50,000 with a remaining legal life of 10 years. Calculate the annual amortization expense using the straight-line method and the book value of the patent after 5 years.arrow_forward
- Robotix Company purchases a patent for $21,000 on January 1. The patent is good for 18 years, after which anyone can use the patent technology. However, Robotix plans to sell products using that patent technology for only 5 years. Prepare the intangible asset section of the year end balance sheet after amortization expense for the year is recorded.arrow_forwardQuiz Company acquired a patent on July 1, Year 1. On the date of acquisition, the patent had a remaining legal life of 12 years and a fair value of $120,000. Quiz Company made a cash payment of $20,000 and signed a 5-year, 6%, $80,000 note to acquire the patent. The note required five equal annual payments. Quiz Company believes that the product under patent was marketable for another 10 years from the date of acquisition. Determine the carrying value of the patent at December 31, Year 2.arrow_forwardGemini Group has acquired a patent for $22.000. Its useful life is expected to be ten years. What amount would be recorded in a periodic amortization journal entry? Amortization Expense-Patents Patents 2,200 2,200 Amortization Expense-Patents 2,000 Patents 20,000 Amortization Expense-Patents 22,000 Patents 22,000 1,200 Amortization Expense-Patents 1,200 Patents Submit Answerarrow_forward
- Marigold Company purchases a patent for $504,000 on January 2, 2022. Its estimated useful life is 18 years. Prepare the journal entry to record amortization expense for the first year.arrow_forwardAt the beginning of the year, a company purchases a patent for $1504000. The remaining legal life of the patent is 10 years, but management estimates that the patent will generate additional revenue for the next 16 years because there are currently no known competitors. What amount of amortization on the patent will be recorded for the asset at the end of the first year, assuming that the straight-line method is used and that the asset was purchased at the beginning of the year? O $-0- $150400 $94000 $188000arrow_forwardJim exploration site cost $1,800,000 at the beginning of the year. The site will be operated for 10 years at which time Bull must return the site to its original state. It is estimated that this will cost $750,000 at the end of the site’s useful life. Assume that Bull uses private entity GAAP. a. Prepare the journal entries for the acquisition of the site and the asset retirement obligation. The effective interest rate is 6%. b. Prepare the journal entries for December 31, 2022.arrow_forward
- Conrad Inc. purchased a patent for $1,000,000 for a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails. Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. 3. After a year of unsuccessful attempts to manufacture the switch plate covers, Conrad Inc. determined the patent was significantly impaired and its book value on January 1, 2020, was written off. Prepare the journal entry to record the impairment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry for impairment. Note: Enter debits before credits: Event General Journal Debit Credit Record entry Clear…arrow_forwardIn 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 bearrow_forwardMumtaj, Inc. is acquiring equipment as follows: Krafton will pay cash of $500,000 and sign a non-interest bearing note with a face amount of $1,661,000.The fair value (i.e. market value) of equipment on 3/31/2021 is $1,500,000The equipment will be placed in operations on the acquisition date with an expected life of 10 years.   Krafton Company uses straight-line depreciation and expects no salvage value.The face amount is payable 3 years from the date of acquisition (3/31/2021). Carter Company uses a calendar year for its fiscal year. Carter Company can currently obtain loans from its banks at an interest rate of 10%Prepare an amortization table for the note payable and all necessary journal entries for the year ended 12/31/2021 including, as appropriate, adjusting entries.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY