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Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022. Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.

Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022. Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.

FINANCIAL ACCOUNTING
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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The Western Company, a company that follows IFRS, provided you with the following information about a number of transactions that took place in 2020: 1) On January 1, 2020 Western acquired a patent for $45,000 cash. The patent expires on January 1, 2028, but the company determined that it will generate future benefits for 6 years from the date of acquisition. During 2022, the total useful life of the patent was revised to 4 years. 2) During March 2020, The Wester Company invested $120,000 in research costs about a new product that it aims to develop in 2021. The amount was paid in cash. 3) The Western Company estimates that its internal goodwill is worth $980,000 in July 2020. Required- a) Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022. b) Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.
Transcribed Image Text:The Western Company, a company that follows IFRS, provided you with the following information about a number of transactions that took place in 2020: 1) On January 1, 2020 Western acquired a patent for $45,000 cash. The patent expires on January 1, 2028, but the company determined that it will generate future benefits for 6 years from the date of acquisition. During 2022, the total useful life of the patent was revised to 4 years. 2) During March 2020, The Wester Company invested $120,000 in research costs about a new product that it aims to develop in 2021. The amount was paid in cash. 3) The Western Company estimates that its internal goodwill is worth $980,000 in July 2020. Required- a) Prepare the journal entries related to the patent from January 1, 2020 to December 31, 2022. b) Prepare the journal entries for 2 and 3. If no journal entry is required, justify why.
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