Marigold Corp., organized in 2022, has the following transactions related to intangible assets. 1/2/22 Purchased patent (7-year life) $528,500 4/1/22 Goodwill purchased (indefinite life) 360,000 7/1/22 Acquired 10-year franchise; expiration date 7/1/2032 380,000 9/1/22 Incurred research and development costs 171,000 (a1) Prepare the necessary entries to record these transactions. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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- QUESTION 1 Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assetsin accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue itsintangible asset at the end of each year. An intangible asset with an estimated useful life of9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on31 December 2018 and the revaluation surplus was correctly recognized on that date. Asat 31 December 2019, the asset was revalued at GH¢32,000. Required: Discuss the accounting treatment required in 2018 and 2019 financial statements. QUESTION 2 E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value. The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. Required: Account for this grant under the netting off method.Exercise 11-19 (Algo) Amortization [LO11-4, 11-5] Janes Company provided the following information on intangible assets: a. A patent was purchased from the Lou Company for $1,350,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $480,000 when Lou sold it to Janes. b. During 2021, a franchise was purchased from the Rink Company for $630,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. c. Janes incurred research and development costs in 2021 as follows: Materials and supplies. Personnel Indirect costs Total d. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. $153,000 193,000 73,000 $419,000 Required: 1. Prepare the entries necessary for years 2019 through 2021 to reflect the above…Exercise 11-19 (Algo) Amortization [LO11-4, 11-5] Janes Company provided the following information on intangible assets a. A patent was purchased from the Lou Company for $800,000 on January 1, 2022. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $370,000 when Lou sold it to Janes b. During 2024, a franchise was purchased from the Rink Company for $520,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. c. Janes incurred research and development costs in 2024 as follows: Materials and supplies Personnel Indirect costs Total $ 142,000 182,000 62,000 $306,000 d. Effective January 1, 2024, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years Required: 1. Prepare the entries necessary for years 2022 through 2024 to reflect the above…
- - What is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,730,000 D. P1,700,000 - Assume the excess of acquisition cost over the underlying equity acquired is due to a piece of equipment with remaining life of 5 years on the date of investment acquisition, and a straight-line depreciation basis, what is the investment carrying amount at December 31, 2021? A. P1,920,000 B. P1,790,000 C. P1,745,000 D. P1,730,000Problem 7-6A (Algo) Record amortization and prepare the intangible assets section (LO7-5) The following information relates to the intangible assets of University Testing Services (UTS): a. On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,306,000 in cash. The fair value of the net identifiable assets of Heinrich was $3,000,000. b. Included in the assets purchased from Heinrich was a patent valued at $92,400. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for only eight more years. c. UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $362,000. The contractual life of the franchise is 10 years. Required: 1. Record amortization expense for the intangible assets at December 31, 2024. 2. Prepare the intangible asset section of the December 31, 2024, balance sheet. Complete this question by entering your answers in the tabs below. Required: Required 2…In January 1, 2020, the following assets of Company A had the following corresponding values: Carrying amount EUL Sound Value Year acquired 5,400,000 5,750,000 *7.600.000 7,850,000 Machinery Equipment O 3.122.600 O 3.050.000 Ⓒ 2.988.000 Residual Value 3.837.500 500,000 400,000 10 12 The company decided to measure these properties using revaluation model. Full year depreciation is taken on the year of purchase. In January 1, 2022, the replacement cost of equipment was revalued at P5.100.000. What is the amount taken to profit or loss as a result of the revaluation on January 1. 2022? 2017 2016
- On January 1, 2022, Edson Company acquired three investment properties: Initial cost Fair value,12/31/2022 Fair value, 12/31/2023 Property 1 Property 2 Property 3 2,700,000 3,200,000 3,500,000 3,450,000 3,300,000 3,000,000 3,900,000 2,800,000 3,400,000 Each property had an estimated useful life of fifty years. The accounting policy is to use the fair value model for investment property. What is the gain or loss to be recognized for the year ended December 31, 2023? A. 250,000 loss B. 400,000 loss C. 300,000 gain D. 700,000 lossProblem 10-60 (LO 10-2, LO 10-3) (Algo) Assume that ACW Corporation has 2023 taxable income of $1,920,000 for purposes of computing the $179 expense. The company acquired the following assets during 2023 (assume no bonus depreciation): (Use MACRS Table 1, Table 2, and Table 5.) Asset Placed in Service 12-September Basis $ 512,000 10-February 21-August 112,000 Machinery Computer equipment Delivery truck Qualified real property (MACRS, 15 year, 150% DB) 02-April Total 135,000 1,422,000 $ 2,181,000 a. What is the maximum amount of §179 expense ACW may deduct for 2023? b. What is the maximum total depreciation that ACW may deduct in 2023 on the assets it placed in service in 2023? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. a. Maximum §179 expense for 2023 b. Maximum total deductible depreciation for 2023Current Attempt in Progress Carla Vista Co., organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025 and 2026. 7/1/25 10/1/25 12/31/25 1/2/26 3/1/26 4/1/26 6/1/26 9/1/26 Intangible Assets 8-year franchise; expiration date 6/30/33 Advance payment on laboratory space (2-year lease) Net loss for 2025 including state incorporation fee, $3,000, and related legal fees of organizing, $7,000 (all fees incurred in 2025) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $48,000 25,800 17,800 80,600 82,000 279,600 12,765 165,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2026, recording any necessary…
- Current Attempt in Progress On January 1, 2023 (the first day of its fiscal year) Swifty Ltd. acquired a patent which gave the company the right to use a production process. The process met the six criteria for capitalization as an intangible asset. Below is a listing of the events relating to the patent over the five fiscal years from 2023 through 2027: 2023: 2024: on January 1, acquired the patent for the production process for a cash payment of $18,600,000, and determined that the process had an indefinite useful life. on December 31, tested the patent for impairment and determined that its fair value was $19,800,000. 2026: on December 31, tested the patent for impairment and determined that its fair value was $17,500,000. 2025: on December 31, tested the patent for impairment and determined that its fair value was $18,000,000. on January 1, determined that the useful life of the patent was no longer indefinite, its carrying amount was recoverable, its estimated remaining useful…15 Clegane Company had the following acquisitions of intangible assets in 2022: Franchise On January 31, 2022, Clegane signed an agreement to operate as franchisee of Clear Copy Service, Inc. for an initial franchise of P780,000. Of this amount, P300,000 was paid when the agreement was signed and the balance was payable in four annual payments of P120,000 each, beginning January 31, 2023. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The implicit rate for loan of this type is 12%. The agreement also provides the 1.5% of the revenue from the franchise must be paid to the franchisor annually. Clegane’s revenue from the franchise in 2022 was P9,500,000. Clegane estimates the useful life of the franchise to be ten years. At the end of 2022, the franchise recoverable amount was P610,000. Trademark On March 1, 2022 Clegane purchased for P400,000 a trademark for a very successful soft drink it markets under the name…m SY. 2021-2022 Problem 3 The following iInformation will be used in Question nos. 11-20 uncements Pag-ibig Corporation acquired 70% of outstanding stocks of Sagigilid Company on January 1, 2019, for P450,000 in cash. Sagigilid Company had a book value of P480,000 on that date. NCI and goodwill were to be measured using the partial goodwill approach. However, an equipment with a 5-year life was overvalued by P30,000 on Sagigilid Company's financial statements. Also, a building with a 15-year life and land were undervalued by P15,000 and P25,000 respectively. Subsequent to acquisition, Sagigilid Company reported the following: Jes slons eButton rences) Year CI Dividends Paid 2019 60,000 12,000 b OPAC 2020 80,000 30,000 2021 120,000 50,000 In accounting for investment, Pag-ibig Company uses the cost method. Selected accounts taken from the financial records of these two companies as of December 31, 2021, are as follows: Pag-ibig Corp. Sagigilid Co. Revenues-Operating 500,000 450,000…