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As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland follows IFRS. (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 all debit entries before credit entries. Round answers to 0 decimal places eg 5.125)

As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. 30 June 1 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland follows IFRS. (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 all debit entries before credit entries. Round answers to 0 decimal places eg 5.125)

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 6Q: What amounts should be recorded as a cost of a long-term asset?
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Amortization Expense Accumulated Amortization - Development Costs (To record amortization expense) 1
Transcribed Image Text:Amortization Expense Accumulated Amortization - Development Costs (To record amortization expense) 1
As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. June 1 30 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland follows IFRS. (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 all debit entries before credit entries. Round answers to O decimal places, e.g. 5,125.)
Transcribed Image Text:As the recently appointed auditor for Sunland Corporation, you have been asked to examine selected accounts before the six-month financial statements of June 30, 2023, are prepared. The controller for Sunland mentions that only one account is kept for intangible assets. The entries in Intangible Assets since January 1, 2023, are as follows: INTANGIBLE ASSETS Jan. 4 5 Feb. 11 Apr. June 1 30 30 Research costs Legal costs to obtain patent Payment of seven months' rent on property leased by Sunland (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 1,057,100 45,000 49,700 160,000 222,000 311,000 Credit 301,100 Prepare the journal entry or entries needed to correct this account. Assume that the patent and the development costs have a useful life of 10 years and that Sunland follows IFRS. (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 all debit entries before credit entries. Round answers to O decimal places, e.g. 5,125.)
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