1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ch4aika [34]
3 years ago
8

On January 1, 2021, Weaver Corporation purchased a patent for $210,000. The remaining legal life is 20 years, but the company es

timates the patent will be useful for only six more years. In January 2023, the company incurred legal fees of $30,000 in successfully defending a patent infringement suit. The successful defense did not change the company’s estimate of useful life. Weaver Corporation’s year-end is December 31.
Business
1 answer:
Ne4ueva [31]3 years ago
7 0

Answer:

Requirement 1. Journal for purchasing Patent:

Jan 01, 2021    Patent Rights (Debit)                    210,000

                                  Cash/Bank (Credit)                            210,000

Requirement 2. Journal for amortization expense for the year ended 31 Dec, 2021:

Dec 31, 2021    Amortization expense - Patent    35,000

                                   Accumulated amortization                 35,000

Requirement 3. Journal for amortization expense for the year ended 31 Dec, 2022:

Dec 31, 2022    Amortization expense - Patent    35,000

                                   Accumulated amortization                 35,000

Requirement 4. Journal for incurring legal fees

Jan 31, 2023     Legal fees                                      30,000

                                    Cash/Bank                                          30,000

Requirement 5. Journal for amortization expense for the year ended 31 Dec, 2023:

Dec 31, 2023    Amortization expense - Patent    35,000

                                   Accumulated amortization                 35,000

Explanation:

Requirement 1.

Since Weaver corporation purchases a patent, it costs the company cash or bank balance. As the patent is a non-current intangible asset, it is a debit. On the other hand, as cash decreases due to the purchase of patent, the cash is a credit. In this journal, an asset (Non-current asset) increases, and another asset (Current asset) decreases. There will be no effect on the total asset.

Requirement 2, 3 and 5. All the calculations will be the same as it is a straight-line method of amortization. Straight-line depreciation (amortization) is a method of expense on an asset over a long period. The expense is the same over the period as the expense is calculated as the total cost divided by the useful number of years. Again, as the patent is an intangible asset; therefore, the asset has to be amortized instead of depreciated.

The amortization expense of patent is = $210,000/6 = $35,000

Since, the company estimates the patent's useful life will be 6 years. Therefore, the amortization expense will be $35,000 for each year.

Requirement 4: Since legal fees is an expense, the company pays for this due to the occurrence of legal issues. The expense decreases the cash; therefore, it is a credit. On the contrary, the legal fees are a debit as it decreases net income. The legal fees, however, does not affect the amortization expense as it is not adding to the cost of the patent.

You might be interested in
Horizon inc., a local electronics manufacturing company, produces a significant amount of electronic waste every day. the compan
hram777 [196]

This scenario illustrates that Horizon has failed to fulfill its <u>"Legal responsibility".</u>


There are legal responsibilities for most private companies. They will differ contingent upon the idea of the business.  

To stay away from issues later on it is imperative to comprehend your commitments. It is critical to know your commitments and legal responsibilities for working a business. This can be perplexing in light of the fact that directions can apply to a wide range of regions of your business.You are in charge of guaranteeing you have the right business enlistments and that they are kept up and recharged.  

6 0
3 years ago
Which statement below is​ FALSE? A. ​Mintzberg's notion of​ "crafting" strategies embodies the artistic​ model, which suggests t
OlgaM077 [116]

Answer:

D

Explanation:

3 0
3 years ago
With respect to the 4ps and marketing research which technique is out of place:_______
Over [174]

Answer:

d

Explanation:

The four P's of marketing are the foundation for which marketing stands on.

They include :

product - this is the good that is being marketed

price - what consumer pays for the good

place - this is where the good is being marketed

promotion - this are the various forms of advertising carried out for the good

8 0
3 years ago
suppose ta hurricane hits alabama causing widespread damage to houses and businesses the governor of alabama places pirce cielin
Mamont248 [21]

Answer:

Shortages of building materials and a slower recovery from the storm

Explanation:

From the question we are informed about an instance, whereby a hurricane hits Alabama, causing widespread damage to houses and businesses. The governor of Alabama places price ceilings on all building materials to keep the prices reasonable. In this case,what most likely result is Shortages of building materials and a slower recovery from the storm.

From law of demand, which expressed that provided other factors remain equal, when price of a good goes higher, then there would be less demand of that good from

people and vice versa. higher price brings lower the quantity demanded, and lower price brings higher the quantity demanded, therefore in the case, above as the price of ceilings on all building materials so that price becomes reasonable people demand more and it leads to Shortages of building materials

6 0
2 years ago
c. What are the major functions of the entrepreneur? Instructions: Click in each box for a 'check-mark' for each correct answer
ipn [44]

Answer:

In your list of options there are 2 Major functions of an entrepreneur:

1. Innovate

2. Take Risks

Explanation:

Remember that being an entrepreneur and being a manager are 2 very different things. When an entrepreneur takes over the functions of a manager then things get more complicated.  You can have a really big company that goes belly up because of bad management but that doesn't mean you had  an incompetent entrepreneur.

The organizing function is one of my personal favorites. Here you have to get everything together, materials, machinery, material resources to operate, legal requirements etc. Then with successful leadership you can execute the plans directed by the entrepreneur.

5 0
3 years ago
Other questions:
  • What does it mean when a skier holds out one hand, thumb up?'?
    14·1 answer
  • Which of the following statements is correct?
    5·1 answer
  • Using the CAPM, compute the cost of equity capital for the lodging division at the target leverage ratio for the division. Expla
    6·1 answer
  • The main difference between storage warehouses and distribution warehouses is that storage warehouses are relatively small, spec
    6·1 answer
  • All of the following are ways that governments encourage international business except?
    8·1 answer
  • During the initial Forming stage, where new team members are excited yet concerned that the project work might be difficult, the
    9·1 answer
  • Which of the following is not a reason for passing the equal pay act of 1963​
    14·1 answer
  • How do i get my grade higher.60-80 and 70-80
    10·2 answers
  • Investors can postpone or avoid income taxes by investing through individual retirement accounts.
    14·1 answer
  • A very safe stock investment that generally attracts conservative investors is called a ________ stock. the dow 30 is made up of
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!