Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below CELESTINE CORPORATION was organized on 2019. Its accounting records include only oneaccount for all intangible assets. The following is a summary of the debit entries that have beenrecorded and posted during 2019 and 2020:INTANGIBLE ASSETSJuly 1, 2019 8-year franchise; expires June 30, 2027126,000Advance payment on leasehold (term of lease is 2 years)December 31, 2019 Net loss 2019 including incorporation fee, P3,000 and relatedlegal fees of organizing. P15, 000 (all fees incurred in 2019)Acquired patent A (25-year life determined by company)October 1, 201984,00048,000January 2, 2020222,000March 1, 2020Cost of developing secret formulaGoodwill purchasedMay 1, 2020 Goodwill arising from business combinationMay 1, 2020 Acquired copyright from the business combination with book225,000April 1, 2020835,200850,000200,000value (amortized for 20 years and expiring in October 2020)June 1, 2020 Registered Patent B at the patenting officeJuly 1, 2020 Legal fee for successful defense of patent purchased aboveSeptember 1, 2020 Legal fees for merger and acquisition documents related to the150,00037,950business combinationResearch and development costsNovember 30, 2020 Purchased Patent C with useful life of 5 years50,000480,000October 1, 2020120,000

Answered: nise; expires payment on leasehold…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Compute for the amount presented as noncash Assets in the balance sheet on December 31, 2020 using the transactions below

CELESTINE CORPORATION was organized on 2019. Its accounting records include only one
account for all intangible assets. The following is a summary of the debit entries that have been
recorded and posted during 2019 and 2020:
INTANGIBLE ASSETS
July 1, 2019 8-year franchise; expires June 30, 2027
126,000
Advance payment on leasehold (term of lease is 2 years)
December 31, 2019 Net loss 2019 including incorporation fee, P3,000 and related
legal fees of organizing. P15, 000 (all fees incurred in 2019)
Acquired patent A (25-year life determined by company)
October 1, 2019
84,000
48,000
January 2, 2020
222,000
March 1, 2020
Cost of developing secret formula
Goodwill purchased
May 1, 2020 Goodwill arising from business combination
May 1, 2020 Acquired copyright from the business combination with book
225,000
April 1, 2020
835,200
850,000
200,000
value (amortized for 20 years and expiring in October 2020)
June 1, 2020 Registered Patent B at the patenting office
July 1, 2020 Legal fee for successful defense of patent purchased above
September 1, 2020 Legal fees for merger and acquisition documents related to the
150,000
37,950
business combination
Research and development costs
November 30, 2020 Purchased Patent C with useful life of 5 years
50,000
480,000
October 1, 2020
120,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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