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 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. Pharoah bought a franchise from Alexander Co.
on January 1, 2019, for $325,000. The carrying amount of the
franchise on Alexander’s books on January 1, 2019, was $325,000.
The franchise agreement had an estimated useful life of 30 years.
Because Pharoah 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, Pharoah incurred
organization costs of $262,500. What amount of organization expense
should be reported in 2020?
The amount to be reported |
$enter the dollar amount to be reported |
4. Pharoah purchased the license for distribution
of a popular consumer product on January 1, 2020, for $145,000. 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, Pharoah 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 |
Presented below is selected information for Pharoah Company. Answer the questions asked about each of the...
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...
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...
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...
Pharoah Company has provided information on intangible assets as follows. A patent was purchased from Shamrock Company for $1,600,000 on January 1, 2019. Pharoah estimated the remaining useful life of the patent to be 10 years. The patent was carried in Shamrock's accounting records at a net book value of $1,600,000 when Shamrock sold it to Pharoah. During 2020, a franchise was purchased from Sheffield Company for $490,000. 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 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...
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...
Carla Vista Company has provided information on intangible assets as follows. A patent was purchased from Tamarisk Company for $1,650,000 on January 1, 2019. Carla Vista estimated the remaining useful life of the patent to be 10 years. The patent was carried in Tamarisk’s accounting records at a net book value of $1,650,000 when Tamarisk sold it to Carla Vista. During 2020, a franchise was purchased from Flint Company for $500,000. In addition, 5% of revenue from the franchise must...