Springer Company had three intangible assets at the end of 2023 (end of the accounting year): a. A copyright purchased on January 1, 2023, for a cash cost of $15,900. The copyright is expected to have a 10-year useful life to Springer. b. Goodwill of $79,000 from the purchase of the Hartford Company on July 1, 2022. c. A patent purchased on January 1, 2022, for $60,000. The inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2018. Springer intends to use the patent for its remaining life. Required: 1. Compute the amortization expense of each intangible for the year ended December 31, 2023. The company does not use contra- accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2023. 2b. Show how the three intangible assets should be reported on the balance sheet for 2023. (Assume there has been no impairment of goodwill.) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Compute the amortization expense of each intangible for the year ended December 31, 2023. The company does not use contra-accounts. Copyright Goodwill Patent Amortization < Req 1 Req 2A >

Springer Company had three intangible assets at the end of 2023 (end of the accounting year): a. A copyright purchased on January 1, 2023, for a cash cost of $15,900. The copyright is expected to have a 10-year useful life to Springer. b. Goodwill of $79,000 from the purchase of the Hartford Company on July 1, 2022. c. A patent purchased on January 1, 2022, for $60,000. The inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2018. Springer intends to use the patent for its remaining life. Required: 1. Compute the amortization expense of each intangible for the year ended December 31, 2023. The company does not use contra- accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2023. 2b. Show how the three intangible assets should be reported on the balance sheet for 2023. (Assume there has been no impairment of goodwill.) Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Compute the amortization expense of each intangible for the year ended December 31, 2023. The company does not use contra-accounts. Copyright Goodwill Patent Amortization < Req 1 Req 2A >

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 76APSA

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The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000
Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000
On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated service life of 5 years and zero residual value. Assume that the straight-line depreciation method is used. Required: Compute the depreciation expense for 2019 for each of the following four alternatives: 1. Horan computes depreciation expense to the nearest day. (Use 12 months of 30 days each and round the daily depreciation rate to 2 decimal places.) 2. Horan computes depreciation expense to the nearest month. Assets purchased in the first half of the month are considered owned for the whole month. 3. Horan computes depreciation expense to the nearest whole year. Assets purchased in the first half of the year are considered owned for the whole year. 4. Horan records one-half years depreciation expense on all assets purchased during the year.
Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.