FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2017, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift feels the patent will be useful for 10 years. Prepare Taylor Swift’s journal entries to record the purchase of the patent and 2017 amortization.arrow_forwardMyron Corp has the following information available related to the equipment it uses in its business. Description Information Purchase Date January 1, 2020 Original Capitalized Cost $800,000 Original Useful Life 5 years Original Residual Value $40,000 On January 1, 2022, Myron made $100,000 worth of extraordinary repairs on this equipment. It financed these repairs by taking out a two-year, 12% note. These repairs are expected to extend the useful life of the equipment by an additional three (3) years past its original five (5) year life (to a new total life of 8 years). There is no change expected to the asset’s residual value. Myron uses the straight-line depreciation method for all its depreciable assets. Part A: Record the journal entry Myron should make on 1/1/22 for the cost of the extraordinary repair.arrow_forwardOn January 1, 2007, Taft Co. purchased a patent for 714,000. The patent is being amortized over its remaining legal life of fifteenyears expiring on January 1, 2022. During 2010, Taft determined that the economic benefits of the patent would not last longer than ten 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, 2010?a.428,400b.489,600c.504,000d.523,600arrow_forward
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