As the recently appointed auditor for Sandhill Corporation, you have been asked to examine selected accounts before the six-monthfinancial statements of June 30, 2023, are prepared. The controller for Sandhill mentions that only one account is kept for intangibleassets. The entries in Intangible Assets since January 1, 2023, are as follows:INTANGIBLE ASSETS45113030Research costsLegal costs to obtain patentPayment of seven months' rent on property leased by Sandhill (February to August)Proceeds from issue of common sharesPromotional expenses related to start-up of businessDevelopment stage costs (meet all six development stage criteria)Start-up costs for first six months of operationsAccount Titles and ExplanationDebitDebit1,043,60057,00050,400159,000222,000314,000CreditCredit309,800Balance1,043,6001,100,6001,151,000841,2001,000,200Prepare the journal entry or entries needed to correct this account. Allocate rent between the prepaid and expense accounts at Jun 30.Assume that the patent and the development costs have a useful life of 10 years and that Sandhill follows IFRS. (Credit account tities areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities andenter 0 for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg 5,125)1,222,2001,536,200

Intangible asset has lack of physical presence but it can termed as monetary presence and it…

4 As the recently appointed auditor for Sandhill Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sandhill mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS 5 11 30 1 30 < Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sandhill (February to August) Proceeds from issue of common shares Promotional expenses related to start-up of business Development stage costs (meet all six development stage criteria) Start-up costs for first six months of operations Debit 1,043,600 57,000 50,400 159,000 222,000 314,000 Credit 309,800 Balance 1,043,600 1,100,600 1,151,000 841,200 1,000,200 1,222,200 1,536,200 Prepare the journal entry or entries needed to correct this account. Allocate rent between the prepaid and expense accounts at Jun 30. Assume that the patent and the development costs have a useful life of 10 years and that Sandhill follows IFRS. (Credit account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter 0 for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, eg. 5,125.)

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