Jan-01 | Patent | $ 1,50,000 | |
Cash | $ 1,50,000 | ||
(Purchase of patent) | |||
Apr-30 | Research & development expenses | $ 75,000 | |
Cash | $ 75,000 | ||
(Payment towards research and development expenses) | |||
Jul-01 | Computer equipment (6000+400+350) | $ 6,750 | |
DellGlobal computer | $ 6,750 | ||
(Purchase of computer from DellGlobal computer and capitalized installation and delivery charges) | |||
Dec-31 | Amortization expense(150000/5) | $ 30,000 | |
Accumulated amortization-Patent | $ 30,000 | ||
(Amortization accounted on the patent) | |||
Dec-31 | Depreciation expense | $ 844 | |
Accumulated depreciation-Computer equipment | $ 844 | ||
(Depreciation expense recognized on the computer) |
R&D expenses
Research and development expenses which are unable to generate cash flows should charge off to profit and loss account.
Computer
All costs incidental to the purchase of an asset should capitalize to asset including installation and delivery cost.
Particulars | Cost | Useful life (years) | Depreciation per year | No of months on 2016 | Depreciation/Amortization for 2016 | Closing Balance as on December 2016 |
Patent | $ 1,50,000 | $ 5 | $ 30,000 | $ 12 | $ 30,000 | $ 1,20,000 |
Computer | $ 6,750 | $ 4 | $ 1,688 | $ 6 | $ 844 | $ 5,906.25 |
(ii)
Non-current assets | ||
(a) Fixed assets | ||
(i) Tangible assets | $ 5,906.25 | |
(ii) Intangible assets | $ 1,20,000 |
QUESTION ONE Part A Advance Media Ltd provides high quality digital solutions to its customers in...
End of Chapter Exercise 8.9
Wilkins Ltd, incorporated in 2015, has these transactions
related to intangible assets in that year:
Jan. 1
Purchased patent (10-year life), $455,840.
July 1
Acquired an existing 6-year franchise; expiration date 1 July
2021, $316,800.
Sept. 1
Research and development costs, $148,400.
Required
Prepare the necessary entries to record these transactions. All
costs incurred were for cash and included GST of 10%. Make the
entries for 31 December 2015, the end of Wilkins Ltd’s financial...
QUESTION 5 Forester Ltd identified the following transactions (listed as 1 to 5) at the end of the financial year 2020 that require an end of period adjustment. 1. Depreciation for the year at a rate of $360 per month has not been accounted for. 2. On 1 September 2020 Forester Ltd paid $16,000 for a one year insurance policy. 3. During the year the company purchased $1,500 of supplies. A count on 31 December determined that $600 of supplies...
On October 1, 2019, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2019. After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2019, unadjusted trial balance of Business Solutions (reflecting its transactions for October and...
prepare journal entries. Please
give right answer
Wattle Ltd manufactures and sells soft drinks. The financial year end is 30 June. The business purchased a new machine for $40,000 cash on 1 January 2015. The expected useful life was 10 years and residual value $2,000. On 30 June 2016, Wattle Ltd adopted the revaluation model to account for the class of machinery. The fair value of the machine was determined to be $32,000 on that date. The useful life and...
Exercise 9-10 a-b (Part Level Submission) Sandhill Ltd. has these transactions related to intangible assets and goodwill in 2018, its first year of operations: Jan. 2 Apr. 1 July 1 Sept. 1 30 Dec. 31 31 Purchased a patent with an estimated useful life of five years for $40,280. The company that sold the patent to Collins registered the patent 10 years ago. Acquired another company and recorded goodwill of $320,700 as part of the purchase. Acquired a franchise for...
Just explain the part I added red notice for it, only how to get
these numbers ( please show me numbers, the calculation, what to
add multiple, dividend to get this result
Refrence
Deegan. (2016). Financial Accounting . McGraw-Hill
Education, Australia
Presented here are selected transactions for Zhou Ltd for the year ended 31 December 2019: Zhou Ltd Jan 1 $ 2019 Jan. 1 $ 60,000 June 30 Scrapped a piece of machinery that was purchased on 1 January 2009...
Exercise 9-10 a-b (Part Level Submission) Sandhill Ltd. has these transactions related to intangible assets and goodwill in 2018, its first year of operations: Purchased a patent with an estimated useful life of five years for $40,280. The company that sold the patent to Collins registered the patent 10 years ago. Jan. 2 Acquired another company and recorded goodwill of $320,700 as part of the purchase. Apr. 1 Acquired a franchise for $234,000. The franchise agreement is renewable without charge...
QUESTION ONE PART A New Century Equipment Ltd offers a 12-month warranty for the sale of used equipment. On 1 July 2015, there was a credit balance of $95 000 in its Warranty Provision account. During the year ended 30 June 2016, New Century Equipment Ltd incurred $105 000 in warranty costs, of which $55 000 was in the form of inventory and $50 000 was for labour costs. At 30 June 2016, New Century Equipment Ltd estimated its liability...
Shamsud Ltd. operates on a calendar-year basis. At the beginning of December 2016, the company had the following current liabilities on its books: Accounts payable $85,000 Rent payable $10,000 Warranty provision $12,000 Unearned revenue $14,000 In December, the following events occurred: 1. Shamsud purchased a new computer system on account at a cost of $28,000, payable on January 15, 2017. In addition to this, $4,000 was paid in cash to have the new system installed and customized to the company's...
Question 4 A machine was acquired on January 1, 2015, at a cost of $80,000. The machine was originally estimated to have a residual value of $5,000 and an estimated life of 5 years. The machine is expected to produce a total of 100,000 components during its life, as follows: 15,000 in 2015, 20,000 in 2016, 20,000 in 2017, 30,000 in 2018, and 15,000 in 2019. Instructions (a) Calculate the amount of depreciation to be charged each year, using each...