Q4. Firoz Corp. obtained a trade name in January 2010, incurring legal costs of SAR15,000. The company amortizes the trade name over 8 years. Firoz, successfully defended its trade name in January 2011, incurring SAR 4,900 in legal fees. At the beginning of 2012, based on new marketing research, Firoz determines that the recoverable amount of the trade name is SAR 12,000. Required: a. Prepare the necessary journal entries on amortization for the years ending December 31, 2010 & 2011. b. In 2012, will Firoz meet any impairment loss? If yes, prepare journal entry to record the impairment loss and amortization entry on 31st Dec 2012
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- 5. Barkley Corp. obtained a tradename in January 2024, incurring legal costs of $72,000. The company amortizes the tradename over 8 years using the straight-line method. Barkley successfully defended its tradename in January 2025, incurring $19,600 in legal fees. At the beginning of 2026, based on new marketing research, Barkley determines that the fair value of the tradename is $60,000. Estimated future net cash flows from the tradename are $64,000 on January 4, 2026. Instructions Prepare the necessary journal entries for the years ending December 31, 2024, 2025, and 2026. Show all computations. misami arb broup qualAeli Corp. obtained a trade name in January 2009, incurring legal costs of P15,000. The company amortizes the trade name over 8 years. Aeli successfully defended its trade name in January 2010, incurring P4,900 in legal fees. At the beginning of 2011, based on new marketing research, Aeli determines that the fair value of the trade name is P12,000. Estimated total future cash flows from the trade name are P13,000 on January 4, 2011. 2009 Dec. 31 Amortization Expense - Trade Name ________ 2010 Dec. 31 Amortization Expense – Trade Name _________ 2011 Dec. 31 Loss on Impairment _________ Total future cash flows 13,000 Therefore, an impairment loss has occurred Carrying value…Problem I SCL Corp. obtained a trade name in January 2017, incurring legal costs of P20,000. The company amortizes the trade name over 8 years. SCL successfully defended its trade name in January 2018, incurring P4,900 in legal fees. At the beginning of 2019, based on new marketing research, SCL determines that the recoverable amount of the trade name is P16,500. Instructions Prepare the necessary journal entries for the years ending December 31, 2017, 2018, and 2019. Show all computations.
- Barkley Corp. obtained a trade name in January 2016, incurring legal costs of $72,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,600 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated undiscounted future cash flows from the trade name are $64,000 on January 4, 2018. On January 4, 2018, what should be recognized as the impairment loss? A) $6,800 B) $10,800 C) $11,150 D) $19,800 E) No impairment lossBarkley Corp. obtained a trade name in January 2016, incurring legal costs of $82,000. The company amortizes the trade name over 8 years. Barkley successfully defended its trade name in January 2017, incurring $19,000 in legal fees. At the beginning of 2018, based on new marketing research, Barkley determines that the fair value of the trade name is $60,000. Estimated future net cash flows from the trade name are $62,000 on January 4, 2018. I. Instructions Prepare the necessary journal entries for the years ending December 31, 2016, 2017, and 2018. Show all computations.In early January 2014, Paltel Company applied for a patent, incurring legal costs of $60,000. In January 2015, Paltel incurred $9,000 of legal fees in a successful defense of its patent.Instructions :(a) Compute 2014 amortization, 31/12/2014 carrying value, 2015 amortization, and 31/12/2015 carrying value if the company amortizes the patent over 10 years.(b) Compute the 2016 amortization and the 31/12/2016 carrying value, assuming that at the beginning of 2016, based on new market research, Paltel determines that the recoverable amount of the patent is $48,000.
- On 1 July 2017, Entity A purchased a chemical machine from Entity B on credit. The purchase price was $4,560,000 and it will be fully settled on 1 August 2017. A legal and professional fee of $35,500 was paid by a cheque to Entity C in order to ensure the machine can be ready for use on 1 July 2017. The economic life of the machine is 5 years without any residual value. According to the purchase contract, Entity A is required to remove the plant on 30 June 2022 and Entity A estimated the dismantling costs of the plant will be $55,123 on that day. Entity A considered that a discount rate of 10.50% is appropriate for the calculation of present value. On 30 June 2022, the actual dismantling costs were only $45,600 and they were paid by a direct bank transfer to Entity D. On 1 July 2022, a recycling company, Entity E, purchased all the machine scraps for $32,500 on credit and agreed to pay in full on 16 July 2022. REQUIRED: According to relevant accounting standards, prepare journal…Dragon Fruit Trading spent P1,440,000 in acquiring a patent on January 3, 2012. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. At the beginning of 2016, the company paid P180,000 for legal fees in a successful defense of the patent. On July 1, 2020, a competitor obtained rights to a patent which made Dragon Fruit's patent obsolete. How much is the loss from the patent obsolescence? * O P216,000 P243,000 P261,000 O P396,000 answer not givenKelly Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be P 500,000. What is the required journal entry as a result of this litigation? *a. Debit Litigation Expense for P 500,000 and credit Litigation liability for P 500,000b. No journal entry is requiredc. Debit Litigation Expense for P 200,000 and credit Litigation Liability for P 200,000d. Debit Litigation Expense for P 300,000 and credit Litigation Liability for P 300,000
- 2. JPIA Company spent P1, 920, 000 in acquiring a patent on January 3, 2016. Due to the competitive nature of the product, the patent was estimated to have a useful life of 10 years. At the beginning of 2018, the company paid P240, 000 for legal fees in a successful defense of the patent. On July 1, 2022, a competitor obtained rights to a patent which made JPIA's patent obsolete. How much is the loss from the patent obsolescence?Crystal Company summarized the following transactions pertaining to its patent. 2012 Spent P250, 000 for the research and development of the patent 2013 Jan. 1 Paid P60, 000 to apply for and obtain right to the patent. The useful life of the patent is 10 years. 2014 Jan. 1 Purchased for P600, 000 a new patent that is expected to prolong the life of the original patent by 6 years. 2015 Dec. 31 A competitor obtained rights to a patent which rendered the entity’s patent obsolete Required: Prepare all entries relating to the patent from 2012 to 2015. rules of answering the problemOn January 3, 2012, the July Company spent P196,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. At the beginning of 2014, the company spent P28,000 in successfully prosecuting an attempted infringement of the patent.. At the beginning of 2017, the company purchased for P60,000 a patent that was expected to prolong the life of its original patent by 5 years. On July 1, 2020, a competitor obtained rights to a patent that made the company's patent obsolete. REQUIRED: Prepare journal entries to record the transactions relative to the patents from January 3, 2012 to July 1, 2020, inclusive.