Pharoah Company, organized in 2022, has the following transactions related to intangible assets. 1/2/22 Purchased patent (7-year life) $605,500 4/1/22 Goodwill purchased (indefinite life) 360,000 7/1/22 Acquired 10-year franchise; expiration date 7/1/2032 600,000 9/1/22 Incurred research and development costs 182,000 (a1) Prepare the necessary entries to record these transactions. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit

Pharoah Company, organized in 2022, has the following transactions related to intangible assets. 1/2/22 Purchased patent (7-year life) $605,500 4/1/22 Goodwill purchased (indefinite life) 360,000 7/1/22 Acquired 10-year franchise; expiration date 7/1/2032 600,000 9/1/22 Incurred research and development costs 182,000 (a1) Prepare the necessary entries to record these transactions. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit

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 62E

See similar textbooks

Similar questions

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.
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.
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
Pronghorn Company, organized in 2020, has the following transactions related to intangible assets. 1/2/22 Purchased patent (8-year life) $592,000 4/1/22 Purchased a small compaly and as a result recorded goodwill. (indefinite life) 360,000 7/1/22 Acquired 13-year franchise; expiration date 7/1/2032 520,000 9/1/22 Incurred research and development costs 178,000 1. Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2022, recording any necessary amortization. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) 2. Calculate ending balances as at 12/31/22. Ending balances Patents $enter a dollar amount…
Swifty Company, organized in 2020, has the following transactions related to intangible assets. 1/2/22 Purchased patent (5-year life) $385,000 4/1/22 Purchased a small compaly and as a result recorded goodwill. (indefinite life) 360,000 7/1/22 Acquired 12-year franchise; expiration date 7/1/2032 456,000 9/1/22 Incurred research and development costs 194,000 Prepare the necessary entries to record these intangibles (all costs incurred were for cash) and calculate ending balances as at 12/31/22.
Marigold Corp., organized in 2020, has the following transactions related to intangible assets. 1/2/20 Purchased patent (6-year life) $474,000 4/1/20 Goodwill purchased (indefinite life) 360,000 7/1/20 14-year franchise; expiration date 7/1/2034 588,000 9/1/20 Research and development costs 166,000 Calculate ending balances as at 12/31/20. Ending balances Patents $enter the ending balance in dollars Goodwill $enter the ending balance in dollars Franchises $enter the ending balance in dollars Research and Development Expense $enter the ending balance in dollars
Cheyenne Corp., organized in 2020, has the following transactions related to intangible assets. 1/2/20 Purchased patent (6-year life) $516,000 4/1/20 Goodwill purchased (indefinite life) 360,000 7/1/20 10-year franchise; expiration date 7/1/2030 380,000 9/1/20 Research and development costs 166,000 Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter…
Bramble Company, organized in 2020, has the following transactions related to intangible assets. 1/2/20 Purchased patent (6-year life) $474,000 4/1/20 Goodwill purchased (indefinite life) 360,000 7/1/20 14-year franchise 588,000 9/1/20 Research and development costs 166,000 (a1) Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) date Account title and explanation debit CREDIT
Lake Company, organized in 2020, has the following transactions related to intangible assets in that year. Lake Company uses the calendar year for financial reporting. 1/1/2020 Purchased patent (9-year life) $540,000 4/1/2020 Purchased trademarks (indefinite life) 240,000 7/1/2020 Purchased copyright on artwork; expiration date 7/1/2035 345,000 12/31/2020 Research and development costs 217,000 Enter your answers below in whole dollars without a $ sign (e.g., xxx). How much expense will Lake Company recognize in 2020 due to the purchased patent? How much expense will Lake Company recognize in 2020 due to the purchased trademarks? How much expense will Lake Company recognize in 2020 due to the purchased copyright? How much expense will Lake Company recognize in 2020 due to its Research and development? Based on the above, what is the net book value of total intangible assets that Lake Company’s balance sheet will show on Dec. 31,…
Lake Company, organized in 2020, has the following transactions related to intangible assets in that year. Lake Company uses the calendar year for financial reporting. 1/1/2020 Purchased patent (9-year life) $540,000 4/1/2020 Purchased trademarks (indefinite life) 240,000 7/1/2020 Purchased copyright on artwork; expiration date 7/1/2035 345,000 12/31/2020 Research and development costs 217,000 Enter your answers below in whole dollars without a $ sign (e.g., xxx). a. How much expense will Lake Company recognize in 2020 due to the purchased patent? b. How much expense will Lake Company recognize in 2020 due to the purchased trademarks? c. How much expense will Lake Company recognize in 2020 due to the purchased copyright? d. How much expense will Lake Company recognize in 2020 due to its Research and development? e. Based on the above, what is the net book value of total intangible assets that Lake Company's balance sheet will show on Dec. 31, 2020?
The intangible assets section of Ayayai Company at December 31, 2022, is presented here. Patents ($83,000 cost less $8,300 amortization) $74,700 Franchises ($54,600 cost less $21,840 amortization) 32,760 Total $107,460 The patent was acquired in January 2022 and has a useful life of 10 years. The franchise was acquired in January 2019 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2023. Jan. 2 Paid $35,100 legal costs to successfully defend the patent against infringement by another company. Sept. 1 Paid $50,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials aired in September and October. Oct. 1 Acquired a franchise for $141,400. The franchise has a useful life of 50 years. Nov.–Dec. Developed a new product, incurring $135,000 in research and development costs during December. A patent was granted for…
During 2022, Pfeiffer Co. purchased intangible assets and debited them all to "Intangible assets". 1-Jan Research and development costs $52,000 1-Jun Goodwill Indefinite Life $64,000 1-Oct Patent 7-Year Life $252,000 (a). Prepare a journal entry to reclassify them to an intangible asset account and/or expense account. (b). Prepare a journal entry to record amortization expense as of December 31, 2022.