FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Carla Vista Corporation has the following selected transactions during the year ended December 31, 2024:
Jan. 1 Purchased a copyright for $117.480 cash. The copyright has a useful life of six years and a remaining legal life of 30
years.
Mar. 1
Sept. 1
Dec. 31
Acquired a franchise with a contract period of nine years for $500,850; the expiration date is March 1, 2033, Paid
cash of $38,820 and borrowed the remainder from the bank.
Purchased a trademark with an indefinite life for $73,190 cash. As the purchase was being finalized, spent $33.150
cash in legal fees to successfully defend the trademark in court.
Purchased an advertising agency for $640,000 cash. The agency's only assets reported on its statement of financial
position immediately before the purchase were accounts receivable of $58,000, furniture of $170,000, and
leasehold improvements of $320,000. Carla Vista hired an independent appraiser who estimated that the fair
value of these assets was accounts receivable $58,000, furniture $180,000, and leasehold improvements
$336,000. Carla Vista is not assuming any liabilities pertaining to the agency.
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Transcribed Image Text:Carla Vista Corporation has the following selected transactions during the year ended December 31, 2024: Jan. 1 Purchased a copyright for $117.480 cash. The copyright has a useful life of six years and a remaining legal life of 30 years. Mar. 1 Sept. 1 Dec. 31 Acquired a franchise with a contract period of nine years for $500,850; the expiration date is March 1, 2033, Paid cash of $38,820 and borrowed the remainder from the bank. Purchased a trademark with an indefinite life for $73,190 cash. As the purchase was being finalized, spent $33.150 cash in legal fees to successfully defend the trademark in court. Purchased an advertising agency for $640,000 cash. The agency's only assets reported on its statement of financial position immediately before the purchase were accounts receivable of $58,000, furniture of $170,000, and leasehold improvements of $320,000. Carla Vista hired an independent appraiser who estimated that the fair value of these assets was accounts receivable $58,000, furniture $180,000, and leasehold improvements $336,000. Carla Vista is not assuming any liabilities pertaining to the agency.
Prepare the entries to record any amortization at December 31, assuming Carla Vista records adjusting entries annually. (List all
debit entries before credit entries. 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)
Date Account Titles and Explanation
Dec. 31
Dec. 31
(To record amortization expense on copyrights)
(To record amortization expense on franchises)
Debit
Credit
10.0
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Transcribed Image Text:Prepare the entries to record any amortization at December 31, assuming Carla Vista records adjusting entries annually. (List all debit entries before credit entries. 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) Date Account Titles and Explanation Dec. 31 Dec. 31 (To record amortization expense on copyrights) (To record amortization expense on franchises) Debit Credit 10.0
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