Ans:
S.NO |
Account Titles and Explanation |
Debit $ |
Credit$ |
1) |
Patent |
$50,000 |
|
cash |
$50,000 |
||
[Entry to record purchase of patent] |
|||
2) |
Amortization expense |
$5000 |
|
Accumulated amortization |
$5000 |
||
[Entry to record patent amortization] |
|||
$50,000/10years |
Note:
1) Because useful life is shorter than its legal life ,we will amortize the patent using its useful life. of 10years
Brief Exercise 12-1 Pronghorn Corporation purchases a patent from Crane Company on January 1, 2017, for...
Brief
Exercise 12-1 Monty Corporation purchases a patent from Sandhill
Company on January 1, 2017, for $55,000. The patent has a remaining
legal life of 12 years. Monty feels the patent will be useful for
10 years. Prepare Monty’s journal entries to record the purchase of
the patent and 2017 amortization. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0...
Brief Exercise 12-2 Flounder Corporation purchases a patent from Pharoah Company on January 1, 2017, for $80,000. The patent has a remaining legal life of 16 years. Flounder feels the patent will be useful for 10 years. Assume that at January 1, 2019, the carrying amount of the patent on Flounder's books is $64,000. In January, Flounder spends $32,800 successfully defending a patent suit. Flounder still feels the patent will be useful until the end of 2026. Prepare the journal...
3
Pina Corporation purchases a patent from Blossom Company on
January 1, 2017, for $59,000. The patent has a remaining legal life
of 16 years. Pina feels the patent will be useful for 10 years.
Assume that at January 1, 2019, the carrying amount of the patent
on Pina’s books is $47,200. In January, Pina spends $24,000
successfully defending a patent suit. Pina still feels the patent
will be useful until the end of 2026.
Prepare the journal entries to...
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Culver Corporation purchases a patent from Sunland Company on January 1, 2020, for $78,000. The patent has a remaining legal life of 16 years. Culver feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Culver’s books is $62,400. In January, Culver spends $25,600 successfully defending a patent suit. Culver still feels the patent will be useful until the end of 2029. Prepare the journal entries to record...
Novak Corporation purchases a patent from Wildhorse Company on January 1, 2020, for $69,000. The patent has a remaining legal life of 16 years. Novak feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Novak’s books is $55,200. In January, Novak spends $26,400 successfully defending a patent suit. Novak still feels the patent will be useful until the end of 2029. Prepare the journal entries to record...
Jaina Corporation purchases a patent from Monty Company on January 1, 2020, for $99,120. The patent has a remaining legal of 16 years. Jaina feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Jaina's books is $79,296. In January, Jaina spends $23,600 successfully defending a patent suit. Jaina still feels the patent will be useful until the end of 2029. Prepare Jaina's journal entries to record the...
Sandhill Corporation purchases a patent from Wildhorse Company
on January 1, 2020, for $100,800. The patent has a remaining legal
of 16 years. Sandhill feels the patent will be useful for 10 years.
Assume that at January 1, 2022, the carrying amount of the patent
on Sandhill's books is $80,640. In January, Sandhill spends $24,000
successfully defending a patent suit. Sandhill still feels the
patent will be useful until the end of 2029.
Prepare Sandhill's journal entries to record the...
Question 4 Martinez Products Ltd, purchased a patent on January 1, 2017, for $870,000. At the time of the purchase, the patent had a remaining legal life of 15 years. In January, 2020, Martinez spent $28,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. Martinez's year-end was December 31. Prepare the entries on the books of Martinez...
image ends after 2017
During 2016, Pronghorn Corporation spent $161,280 in research and development costs. As a result, a new product called the New Age Piano wa patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $36,720 related to the patent were incurred as of October 1, 2016. Prepare all journal entries required in 2016 and 2017 as a result of the...