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ch4aika [34]
2 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]2 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.

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Explanation:

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8 0
3 years ago
As a graduating senior, Chun Kumora of Manhattan, Kansas, is eager to enter the job market at an anticipated annual salary of $5
sammy [17]

Answer:

a. Chun Kumora's salary in ten years=$72,571.48

b. Chun Kumora's salary in twenty years=$97,530.01

c. Amount of raise Chun needs to receive next year=$1,620

d. Amount of raise Chun needs to receive the year after=$3,288.60

Explanation:

When choosing a career, there are various factors that need to be considered. One such factor is the salary. The expected salary should match with the salary average salary in the market. In our case, the annual salary is expected to be $54,000, but in order to estimate future salary requirements, the inflation rate has to be considered since the value of money reduces with time. Lets solve Chun Kumora's case as follows;

a. Salary in ten Years

The future value of the $54,000 salary in ten years while accounting for inflation can be expressed as;

F.V=P.V(1+r)^n

where;

F.V=future value

P.V=present value

r=inflation rate

n=number of years

In our case;

F.V=unknown, yet to be determined

P.V=$54,000

r=3%=3/100=0.03

n=10 years

replacing;

F.V=54,000(1+0.03)^10

F.V=54,000(1.03)^10

F.V=$72,571.48

Chun Kumora's salary in ten years=$72,571.48

b. Salary in twenty Years

The future value of the $54,000 salary in twenty years while accounting for inflation can be expressed as;

F.V=P.V(1+r)^n

where;

F.V=future value

P.V=present value

r=inflation rate

n=number of years

In our case;

F.V=unknown, yet to be determined

P.V=$54,000

r=3%=3/100=0.03

n=20 years

replacing;

F.V=54,000(1+0.03)^20

F.V=54,000(1.03)^20

F.V=$97,530.01

Chun Kumora's salary in twenty years=$97,530.01

c.

Amount of raise Chun needs to receive next year;

In our case;

F.V=unknown, yet to be determined

P.V=$54,000

r=3%=3/100=0.03

n=1 year

replacing;

F.V=54,000(1+0.03)^1

F.V=54,000(1.03)^1

F.V=$55,620

Raise=Amount next year-current amount

where;

Amount next year=$55,620

current amount=$54,000

replacing;

Raise=56,620-54,000=$1,620

d.

Amount of raise Chun needs to receive the year after;

In our case;

F.V=unknown, yet to be determined

P.V=$54,000

r=3%=3/100=0.03

n=2 year

replacing;

F.V=54,000(1+0.03)^2

F.V=54,000(1.03)^2

F.V=$57,288.60

Raise=Amount next year-current amount

where;

Amount next year=$57,288.60

current amount=$54,000

replacing;

Raise=$57,288.60-54,000=$3,288.60

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hram777 [196]
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Bonnie Austin, age 30, used to work part time in a local restaurant. This year she quit her job to take care of her five-month-o
sergiy2304 [10]

Answer:

The survey conducted by the Bureau of Labor Statistics today will count Bonnie as not in the labor force .

Explanation:

" not in the labor force " -

The people who are not employed and even are not unemployed are called the " not in the labor force " .

The people who are present in this category are the -

  • retired peoples ,
  • students
  • The people taking care of children ,
  • people who are not working but searching for job ,

All of them fall in this category .

Hence , according to the survey , Bonnie is under the category of " not in the labor force " .

3 0
3 years ago
You are ready to buy a house, and you have $20,000 for a down payment and closing costs. Closing costs are estimated to be 4% of
Bess [88]

Answer:

So we can offer for the house $180119.95

Explanation:

Monthly income =$4000

Monthly mortgage payment allowed (P)= 25% of 4000= $1000

Interest rate per month (i)= 0.5%

Number of months in total (n)= 30*12= 360

Maximum loan affordable = P*(1-(1/(1+i)^n))/i

=1000*(1-(1/(1+0.5%)^360))/0.5%

=$166791.61

Closing cost is 4% of loan value = 166791.61*4% =$6671.66

Balance Amount left for down payment = 20000-6671.66

=$13328.34

It means we can pay $6671.66 for closing cost of Loan and $13328.34 for down payment.

Cost of house paid maximum = Down payment + Affordable loan

=13328.34+166791.61

=$180119.95

So we can offer for the house $180119.95

7 0
3 years ago
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