1. Sandhill purchased a patent from Vania Co.
for $1,190,000 on January 1, 2018. The patent is being amortized
over its remaining legal life of 10 years, expiring on January 1,
2028. During 2020, Sandhill determined that the economic benefits
of the patent would not last longer than 6 years from the date of
acquisition. What amount should be reported in the balance sheet
for the patent, net of accumulated amortization, at December 31,
2020?
The amount to be reported | $enter the dollar amount to be reported |
2. Sandhill bought a franchise from Alexander Co.
on January 1, 2019, for $345,000. The carrying amount of the
franchise on Alexander’s books on January 1, 2019, was $495,000.
The franchise agreement had an estimated useful life of 30 years.
Because Sandhill must enter a competitive bidding at the end of
2021, it is unlikely that the franchise will be retained beyond
2028. What amount should be amortized for the year ended December
31, 2020?
The amount to be amortized | $enter the dollar amount to be amortized |
3. On January 1, 2020, Sandhill incurred
organization costs of $272,500. What amount of organization expense
should be reported in 2020?
The amount to be reported | $enter the dollar amount to be reported |
4. Sandhill purchased the license for distribution
of a popular consumer product on January 1, 2020, for $149,000. It
is expected that this product will generate cash flows for an
indefinite period of time. The license has an initial term of 5
years but by paying a nominal fee, Sandhill can renew the license
indefinitely for successive 5-year terms. What amount should be
amortized for the year ended December 31, 2020?
The amount to be amortized | $enter the dollar amount to be amortized |
(1) The amount to be reported- 714,000 $
(2) The amount to be amortized- 41,688 $
(3) The amount to be reported- 272,500 $
(4) The amount to be amortized- 29,800 $
1. Sandhill purchased a patent from Vania Co. for $1,190,000 on January 1, 2018. The patent...
1. Wildhorse purchased a patent from Vania Co. for $1,310,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Wildhorse determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported...
Presented below is selected information for Pharoah Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter 0 for amounts.) 1. Pharoah purchased a patent from Vania Co. for $1,150,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Pharoah determined that the economic benefits of the patent would not last longer than 6 years from...
Exercise 12-04 Presented below is selected information for Pharoah Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter 0 for amounts.) 1. Pharoah purchased a patent from Vania Co. for $1,260,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Pharoah determined that the economic benefits of the patent would not last longer than 6...
Presented below is selected information for Sheridan Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter 0 for amounts.) 1. Sheridan purchased a patent from Vania Co. for $1,160,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Sheridan determined that the economic benefits of the patent would not last longer than 6 years from...
Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1,750,000 on January 1, 2019. Sandhill estimated the remaining useful life of the patent to be 10 years. The patent was carried in Teal Mountain's accounting records at a net book value of $1,750,000 when Teal Mountain sold it to Sandhill. During 2020, a franchise was purchased from Monty Company for $450,000. In addition, 5% of revenue from the franchise must...
Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1,600,000 on January 1, 2019. Sandhill estimated the remaining useful life of the patent to be 10 years. The patent was carried in Teal Mountain’s accounting records at a net book value of $1,600,000 when Teal Mountain sold it to Sandhill. During 2020, a franchise was purchased from Indigo Company for $450,000. In addition, 5% of revenue from the franchise must...
Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Marin Company for $1,800,000 on January 1, 2019. Cullumber estimated the remaining useful life of the patent to be 10 years. The patent was carried in Marin’s accounting records at a net book value of $1,800,000 when Marin sold it to Cullumber. During 2020, a franchise was purchased from Bramble Company for $510,000. In addition, 5% of revenue from the franchise must be paid to...
Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Marin Company for $1,800,000 on January 1, 2019. Cullumber estimated the remaining useful life of the patent to be 10 years. The patent was carried in Marin’s accounting records at a net book value of $1,800,000 when Marin sold it to Cullumber. During 2020, a franchise was purchased from Bramble Company for $510,000. In addition, 5% of revenue from the franchise must be paid to...
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...
Crane Co. bought a patent from Cullumber Corp. on January 1, 2021, for $897000. An independent consultant retained by Crane estimated that the remaining useful life at January 1, 2021 is 15 years. Its unamortized cost on Cullumber’s accounting records was $448500; the patent had been amortized for 5 years by Cullumber. How much should be amortized for the year ended December 31, 2021 by Crane Co.? $59800. $44850. $89700. $0. Sandhill Corporation incurred the following costs in 2021: Acquisition...