Question

10-5 only

To aid extraction, Jackpot purchased some new equipment on July 1, 2018, for $120,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 10%. Required: 1. Determine the cost of the copper mine. 2. Prepare the journal entries to record the acquisition costs of the mine and the purchase of equipment. E 10-5 Intangibles • L010-1 In 2018, Bratten Fitness Company made the following cash purchases: 1. The exclusive right to manufacture and sell the X-Core workout machine from Symmetry Corporation for $200,000. Symmetry created the unique design for the machine. Bratten also paid an additional $10,000 in legal and filing fees to attorneys to complete the transaction. 2. An initial fee of $300,000 for a three-year agreement with Silver's Gym to use its name for a new facility in the local area. Silver's Gym has locations throughout the country. Bratten is required to pay an additional fee of $5,000 for each month it operates under the Silver's Gym name, with payments beginning in March 2018. Bratten also purchased $400,000 of exercise equipment to be placed in the new facility. 3. The exclusive right to sell Healthy Choice, a book authored by Kent Patterson, for $25,000. The book includes healthy recipes, recommendations for dietary supplements, and natural remedies. Bratten plans to display the book at the check-in counter at its new facility, as well as make it available online. Required: Prepare a summary journal entry to record expenditures related to initial acquisitions. E 10-6 Goodwill LO10-1 On March 31, 2018, Wolfson Corporation acquired all of the outstanding common stock of Barney Corporation for $17,000,000 in cash. The book values and fair values of Barney's assets and liabilities were as follows: Current assets Property, plant, and equipment Other assets Current liabilities Long-term liabilities Book Value $ 6,000,000 11,000,000 1,000,000 4,000,000 6,000,000 Fair Value $ 7,500,000 14,000,000 1,500,000 4,000,000 5,500,000 Required: Calculate the amount paid for goodwill.

Answer 1

Event Credit 11 General Journal Debit Patent $210,000 Franchise $300,000 Equipment $400,000 Copyright $25,000 Cash (Being expenditures related to initial acquisitions recorded Calculation: Patent – $200,000 + Additional fers = $ 200,000 +$10,000 z $ 210,000 $935,000