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Mrac [35]
3 years ago
10

Lamont Communications has amortized a patent on a straight-line basis since it was acquired in 2010 at a cost of $50 million. Du

ring 2013 management decided that the benefits from the patent would be received over a total period of 8 years rather than the 20-year legal life being used to amortize the cost. Lamont's 2013 financial statements should include:
A) A patent balance of $50 million.
B) Patent amortization expense of $2.5 million.
C) Patent amortization expense of $5 million.
D) A patent balance of $34 million.
Business
1 answer:
Fittoniya [83]3 years ago
6 0

Answer:

C) Patent amortization expense of $5 million.

Explanation:

Patent acquisition date is 2010

Cost of acquisition = $50 million

Initial Useful life = 20 years

Annual amortization = $50,000,000/20

                                  = $2,500,000

Between 2010 and start of 2013 is 3 years

Carrying value at the start of 2013

= 50,000,000 - 3(2,500,000)

= $42,500,000

If patent would be received over a total period of 8 years rather than the 20-year legal life being used to amortize the cost,

Patent amortization expense in 2013 = $42,500,000/8

                                                              = $5,312,500

This can be estimated as $5 million.

The right option is C) Patent amortization expense of $5 million.

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Marlin Corporation reported pretax book income of $1,003,000. During the current year, the net reserve for warranties increased
Maksim231197 [3]

Answer:

Explanation:

pretax book income 1,003,000

warranties increased 25,600

depreciation exceeded tax depreciation 100,300

dividends received deduction -15,300

Net amount $1,113,600

Taxable amount is $1,113,600

In order to find income tax expense or benefit, multiply the taxable amount by tax rate.

7 0
3 years ago
Read 2 more answers
In 2016, Carow sold 3,000 units, at $500 each. Variable expenses were $250 per unit, and fixed expenses were $500,000. The same
photoshop1234 [79]

Answer:

The correct answer is D.

Explanation:

Giving the following information:

In 2016, Carow sold 3,000 units, at $500 each. Variable expenses were $250 per unit, and fixed expenses were $500,000.

The same selling price is expected for 2017. Carow is tentatively planning to invest in equipment, that would increase fixed costs by 20% while decreasing variable costs per unit by 20%.

First, we need to calculate the ner fixed and variable costs:

Fixed costs= 500,000*1.20= $600,000

Variable costs= 250*0.8= $200

Now, we can calculate the break-even point:

Break-even point= fixed costs/ contribution margin

Break-even point= 600,000 / (500 - 200)= 2,000 units

5 0
3 years ago
When museums charge a lower admission fee to students and senior citizens, this form of price discrimination is known as _______
AVprozaik [17]

Segmented pricing is a situation, when seller or a company establishes different prices (two or more), for one the same product.

Price segmentation, to put it simply, is the process of differentiating pricing based on willingness to pay. It is motivated by the reality that customers' price sensitivity might differ greatly from one another, from one product to another, and throughout all the environments in which they use your product.

With price segmentation, you may set different prices for various consumer types according to their willingness and ability to pay. Price segmentation allows you to profit more from consumers who spend the most and less from those who pay the least.

Learn more about Price segmentation here

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3 0
1 year ago
As a junior congress person you have been asked to help promote a bill to allow casino gambling in your state. There is much opp
MariettaO [177]

Explanation:

I would promote the establishment of the Casino Gambling Bar in my state and plan my arguments for discussion on the following items:

Casino deserves to play in the State:

More collection of revenue in the form of tax for the administration.

Tourist inflows on weekends, which lead to additional state revenues.

Boost in other businesses, such as casinos, pubs, car parks, gas sales, beer sales and expanded road tax collection.

Improved prospects for jobs.

The increased income selection will create a tourist attraction for the state residents, such as the ocean or a lake.

The demerits I can list and probably face during the argument are:

Concerns of law and order: Night operations are improved and provisions for the Casino Licensing are complied with.

It can increase drug trafficking. Education shall be taken by the police and other law enforcement agencies.

Drug addicts can harm the state: police take care. drug addicts.

Nightlife can be achieved for neighboring residents. Credit shall be taken on night patrols.

Can increase the number of road accidents caused by drunk driving.

Case that Casino Gambling is not new to America. Any real and concrete ties to ill effects such as opined use, drug trafficking and other ill effects are only attributed to a gaming casino.

If all the negative effects expected or perceived by the law enforcement agency are tracked, all the negative effects may be entirely eradicated and savings can be gained from increased revenues by the state.

Discussions with all state machinery must be held before the property is transferred to the casino and the police office can also provide its guidance during this time.

5 0
3 years ago
Whole milk is one of the joint products in a joint manufacturing process. Management is considering whether to sell the whole mi
Karo-lina-s [1.5K]

Answer:

Option (b) : I, II, III, and IV

Explanation:

As per the data given in the question,

In order to evaluate weather a product is sold at a split-off point or can be further processed, the joint processing costs that have already been obtained will have no effect on the decision because the costs and revenues that will be acquired and obtained after consideration will have to be decided whether to continue processing or not. The sunken cost is the cost of processing jointly. Therefore it will not affect the decision to process further or not.

Hence, Option (b) : I, II, III, and IV is correct answer

7 0
2 years ago
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