Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2024, for $3.5 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $260,000 at the end of five years. Assuming the straight-line method is used, what is Granite's patent amortization for 2024? Multiple Choice $324,000 $350,000 $648,000 $700,000

Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2024, for $3.5 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $260,000 at the end of five years. Assuming the straight-line method is used, what is Granite's patent amortization for 2024? Multiple Choice $324,000 $350,000 $648,000 $700,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6EA: Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of...

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Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2025, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when 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.) Account Titles and Explanation Patents cash (To record purchase of patents) Amortization Expense Patents (To record amortization of patents) Debit 24,000 8400 Credit 24,000 24,000
Sandhill Company acquired a patent on an oil extraction technique on January 1, 2025 for $7300000. It was expected to have a 10- year life and no residual value. Sandhill uses straight-line amortization for patents. On December 31, 2026, the future cash flows expected from the patent were $840000 per year for the next eight years. The fair value of the patent is $4100000. At what amount should the patent be carried on the December 31, 2026 balance sheet? O $5840000. O $7300000. O $4100000. O $6720000.
Ayayai Corporation purchases a patent from Blossom Company on January 1, 2025, for $63,000. The patent has a remaining legal life of 14 years. Ayayai estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Ayayai's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when 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.) Account Titles and Explanation (To record purchase of patents) (To record amortization of patents) Debit Credit
1. Pharoah purchased a patent from Vania Co. for $2,700,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Pharoah determined that the economic benefits of the patent would not last longer than 7 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported 2$ 2. Pharoah bought a franchise from Alexander Co. on January 1, 2019, for $979,000. The carrying amount of the franchise on Alexander's books on January 1, 2019, was $635,000. The franchise agreement had an estimated useful life of 20 years. Because Pharoah must enter a competitive bidding at the end of 2028, it is unlikely that the franchise will be retained beyond 2028. What amount should be amortized for the year ended December 31, 2020? The amount to be amortized 3. On January 1, 2020, Pharoah incurred organization…
Remington Corporation purchases a patent from Durler Company on January 1, 2020, for $84,000. The patent has a remaining legal of 16 years. Remington feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Remington's books is $67,200. In January, Remington spends $20,000 successfully defending a patent suit. Remington still feels the patent will be useful until the end of 2029. Prepare Remington's journal entries to record the amortization for 2020 and 2022.
May I ask for help with this question? I got an answer of 62,500 (Rounded Up) Please check. On January 1, 20x1, T Co. purchase a patent from B Inc. for P500,000. Blue has held this patent for 5 years. T estimates that the patent has a remaining useful life of eight years. How much is the patent amortization in 20x1?
May I ask for help with this question? I believe the answer is 97, 500 (Rounded Up) Please check. On January 1, 20x1, T Co. purchase a patent from B Inc. for P500,000. Blue has held this patent for 5 years. T estimates that the patent has a remaining useful life of eight years. On January 1, 20x3, T Co. purchase a competitive patent from G Corp. for P210,000 in order to protect the old patent. The competitive patent has a remaining legal life and useful life of 20 years. How much is the total amortization expense in 20x3?
On January 1, 20X3, Enid Corporation purchased a patent from another company for $190,000. The estimated useful life of the patent is 10 years, and its remaining legal life is 15 years. The amortization expense for 20X3 is: Question 5 options: $12,667. $85,000. $68,000. $19,000.
On January 1, 2020, Ella Company acquired the following intangible assets: • A trademark for P2,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without a problem. • A patent for P4,000,000. Because of market condition, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years. On December 31, 2020, the intangible assets are assessed for impairment. Because of a decline in the economy, the trademark is expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 annually for each of the next four years. The appropriate discount rate for all intangible assets is 8%. Ella Company shall recognized a total impairment loss in 2020 at a. P2,045,000 b. P1,545,000 c. P2,845,000 d. P1,980,000…
On January 1, 2020, Ella Company acquired the following intangible assets: • A trademark for P2,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without a problem. • A patent for P4,000,000. Because of market condition, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years. On December 31, 2020, the intangible assets are assessed for impairment. Because of a decline in the economy, the trademark is expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 annually for each of the next four years. The appropriate discount rate for all intangible assets is 8%. Ella Company shall recognized a total impairment loss in 2020 at a. P2,045,000 b. P1,545,000 c. P2,845,000 d. P1,980,000
(Multiple Choice Question) Abesu Inc. purchased equipment costing $20,000 on January 1, 2019. The equipment amortizes at a rate of 4% each year. Calculate the amortization expense on the equipment for 2020. 1. $1600 2. $800 3. $1568 4. None of the answers are correct 5. $768