Presented below is selected information for Sandhill Company.Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.)(a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in2017?Amount to be reported$(b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on CarlaVista's books on January 1, 2016, was $238,00O. The franchise agreement had an estimated useful life of 10 years. Because Sandhillmust enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amountshould be amortized for the year ended December 31, 2017?Amount to be amortized$%24 (c) Sandhill purchased a patent from Epp Co. for $610,000 on January 1, 2015. The patent is being amortized over its remaining legallife of 10 years, expiring on January 1, 2025. During 2017, Sandhill determined that the economic benefits of the patent would not lastlonger than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net ofaccumulated amortization, at December 31, 2017?Amount to be reported$(d) Sandhill purchased the license for distribution of a popular consumer product on January 1, 2017, for $74,400. It is expected thatthis product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominalfee, Sandhill can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year endedDecember 31, 2017?Amount to be amortized$

Name: Presented below is selected information for Sandhill Company.Answer t
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Description: Presented below is selected information for Sandhill Company.Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.)(a) On January 1, 2017, Sandhill incurred organization costs of

Calculations: (1.) Organization cost incurred on 1 Jan. 2017 of Rs. 265000 and same to be amortized till the date of franchise life i,e, 9 Years from 1 Jan. 2017. Organization expenses for the Year 2017 will be = 265,000/9 = 29,444.44 (2.) Sheridan has purchased the asset in value of 190,000 for 10 Years but as per the question franchise will be remained up to 2025 only hence economic life of the asset is 9 Years i.e. from 2016 to 2025. Hence amortisation value per year is = 190,000/9 = 21,111.11 (As per GAAP Rules) Now value after 2 years i.e. 31.12.2017 will be = 190,000 - 21,111.11 (for year 2016) - 21,111.11 ( for the year 2017) = 147,777.78 (3.) Value as on 1 January 2015 = 610,000, Life = 10 Years, Amortization Value per Year = 610,000/10 = 61,000 Value as 01 January 2016 = 610,000 - 61,000 = 549,000 value as 01 January 2017 = 549,000 - 61,000 = 488,000. But now it is mentioned that life is 6 year from the date of acquisition and as on January 2017 remaining life from the date of acquisition is 4 Years hence assets will be writte off in 4 Years as per the GAAP Rules. Hence new amortisation for the remaining life of assets is 488,000/4 = 122,000 and value as on 31.12.2017 is = 488,000 - 122,000 = 366,000 only. (4.) As per GAAP Rules " Assets with indefinite lives and goodwill are not amortized but are tested for impairment." Hence the cost of a license with indefinite life for cash flow will not be amortized and the value of amortization will be zero. Final answer: 1. 29,444.44 2. 147,777.78 3. 366,000 4. 0

Business

Accounting

Presented below is selected information for Sandhill Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) (a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in 2017? Amount to be reported 2$ (b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on Carla Vista's books on January 1, 2016, was $238,000. The franchise agreement had an estimated useful life of 10 years. Because Sandhill must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017? Amount to be amortized

Presented below is selected information for Sandhill Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) (a) On January 1, 2017, Sandhill incurred organization costs of $265,000. What amount of organization expense should be reported in 2017? Amount to be reported 2$ (b) Sandhill bought a franchise from Carla Vista Co. on January 1, 2016, for $190,000. The carrying amount of the franchise on Carla Vista's books on January 1, 2016, was $238,000. The franchise agreement had an estimated useful life of 10 years. Because Sandhill must enter a competitive bidding at the end of 2018, it is unlikely that the franchise will be retained beyond 2025. What amount should be amortized for the year ended December 31, 2017? Amount to be amortized

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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Four Queens Corp. reports operating expenses in two categories: (1) Selling; and (2) General and Administrative. The adjusted trial balance at December 31, 2021 included the following expense and loss accounts: Accounting and Legal Fees - P120,000; Advertising - P150,000; Freight-out - P80,000; Depreciation Expense - Store Equipment Expense - P70,000; Loss on Sale of Equity Investment at fair Value Through Profit or Loss - P30,000; Officer's Salaries - P225,000; Rent Expense - P220,000; Sales Salaries and Commissions - P140,000. One-half of rented premises is occupied by the sales department. Four Queen shall report total selling expenses for 2021 of: a. P550,000 b. P480,000 c. P360,000 d. P370,000