Crane Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (9-year life) $407,700 4/1/20 Purchase goodwill (indefinite life) 363,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 443,000 8/1/20 Payment of copyright (5-year life) 171,600 9/1/20 Research and development costs 233,000 $1,618,300 (a1) Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (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 O for the amounts.) Account Titles and Explanation Debit Credit

Crane Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (9-year life) $407,700 4/1/20 Purchase goodwill (indefinite life) 363,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 443,000 8/1/20 Payment of copyright (5-year life) 171,600 9/1/20 Research and development costs 233,000 $1,618,300 (a1) Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (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 O for the amounts.) Account Titles and Explanation Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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Dinnell Company owns the following assets: In the year of acquisition and retirement of an asset, Dinnell records depreciation expense for one-half year. During 2020, Asset A was sold for 7,000. Required: Prepare the journal entries to record depreciation on each asset for 2017 through 2020 and the sale of Asset A. Round all answers to the nearest dollar.
Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) $348,800 4/1/20 Purchase goodwill (indefinite life) 346,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 426,000 8/1/20 Payment of copyright (5-year life) 151,200 9/1/20 Research and development costs 216,000 $1,488,000 1). Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. 2). Make the entry as of December 31, 2020, recording any necessary amortization 3). Make the entry as of December 31, 2020, recording any necessary amortization Use straight-line amortization
Marshall Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) $ 350,000 4/1/20 Purchase goodwill (indefinite life) 360,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 450,000 8/1/20 Payment of copyright (5-year life) 156,000 9/1/20 Research and development costs 215,000 $1,531,000 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2020, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
Reichenbach Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. Intangible Assets 7/1/20 8-year franchise; expiration date 6/30/25 $ 48,000 10/1/20 Advance payment on laboratory space (2-year lease) 24,000 12/31/20 Net loss for 2020 including state incorporation fee, $1,000, and related legal fees of organizing, $5,000 (all fees incurred in 2020) 16,000 1/2/21 Patent purchased (10-year life) 84,000 3/1/21 Cost of developing a secret formula (indefinite life) 75,000 4/1/21 Goodwill purchased (indefinite life) 278,400 6/1/21 Legal fee for successful defense of patent purchased above 12,650 9/1/21 Research and development costs 160,000 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2021,…
Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) 4/1/20 Purchase goodwill (indefinite life) 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 Payment of copyright (5-year life) Research and development costs 8/1/20 9/1/20 (a1) $348,800 346,000 426,000 151,200 216,000 $1,488,000 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (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 o for the amounts) Account Titles and Explanation Debit Credit
Wildhorse Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. Intangible Assets 7/1/20 8-year franchise; expiration date 6/30/28 $52,800 10/1/20 Advance payment on laboratory space (2-year lease) 24,000 12/31/20 Net loss for 2020 including state incorporation fee, $1,500, and related legal fees of organizing, $5,500 (all fees incurred in 2020) 12,400 1/2/21 Patent purchased (10-year life) 83,800 3/1/21 Cost of developing a secret formula (indefinite life) 88,000 4/1/21 Goodwill purchased (indefinite life) 274,600 6/1/21 Legal fee for successful defense of patent purchased above 13,685 9/1/21 Research and development costs 173,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December…
Wildhorse Co., organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020 and 2021. Intangible Assets 7/1/20 8-year franchise; expiration date 6/30/28 $52,800 10/1/20 Advance payment on laboratory space (2-year lease) 24,000 12/31/20 Net loss for 2020 including state incorporation fee, $1,500, and related legal fees of organizing, $5,500 (all fees incurred in 2020) 12,400 1/2/21 Patent purchased (10-year life) 83,800 3/1/21 Cost of developing a secret formula (indefinite life) 88,000 4/1/21 Goodwill purchased (indefinite life) 274,600 6/1/21 Legal fee for successful defense of patent purchased above 13,685 9/1/21 Research and development costs 173,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December…
Carla Vista Co., organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025 and 2026, C 7/1/25 10/1/25 12/31/25 1/2/26 3/1/26 4/1/26 6/1/26 9/1/26 Intangible Assets 8-year franchise; expiration date 6/30/33 Advance payment on laboratory space (2-year lease) Net loss for 2025 including state incorporation fee, $3,000, and related legal fees of organizing. $7,000 (all fees incurred in 2025) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs Account Titles and Explanation (To clear the Intangible Assets) (To record current amount for Franchises) (To record current amount for Rents) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the…
Carla Vista Company, organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025. 1/2/25 Purchased patent (9-year life) Purchase goodwill (indefinite life) Purchased franchise with 10-year life; expiration date 7/1/35 4/1/25 7/1/25 8/1/25 Payment of copyright (5-year life) 9/1/25 Research and development costs $394,200 348,000 428,000 153,600 218,000 $1,541,800
(Recording and Amortization of Intangibles) Parrish Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020: 1/2/20 Purchased patent (8-year life) $ 625,000 4/1/20 Purchased goodwill (indefinite life) 540,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 675,000 8/1/20 Payment for copyright (5-year life) 246,000 9/1/20 Research and development costs 342,500 $2,428,500 Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2020, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)
You noted the following items relative to the company's intangibles assets of Pete Corporation at December 31, 2020.• On January, 2019 Pete signed an agreement to operate as franchisee of Clear Copy Service, Inc., for an initial franchise of P680,000. Of this amount, P200,000 was paid when the agreement was signed and the balance was payable in four annual payment of P120,000 each beginning on January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required in the franchisor. The implicit rate for loan of this type is 14%. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Pete's revenue from the franchise for 2020 was P8,000,000. Pete estimates the useful life of the franchise to be ten years.• Pete incurred P624,000 of experimental development costs in its laboratory to develop a patent which was granted on January 2, 2019, Legal fees and other costs associated with the…
Sandhill Co., organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025 and 2026. 7/1/25 10/1/25 12/31/25 1/2/26 3/1/26 4/1/26 6/1/26 9/1/26 Intangible Assets 8-year franchise; expiration date 6/30/33 Advance payment on laboratory space (2-year lease) Net loss for 2025 including state incorporation fee, $1,000, and related legal fees of organizing, $5,000 (all fees incurred in 2025) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $60,000 26,400 12,400 84,400 85,000 277,000 12,995 180,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2026, recording any necessary amortization. (Ignore income tax…