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zhannawk [14.2K]
3 years ago
5

Martinez Corporation owns a patent that has a carrying amount of $310,000. Martinez expects future net cash flows from this pate

nt to total $250,000. The fair value of the patent is $160,000. Prepare Martinez’s journal entry to record the loss on impairment.
Business
1 answer:
meriva3 years ago
6 0

Answer:

Please find the detailed answer as follows:

Explanation:

Step 1. Given information.

Carrying amount 310.000

Fair Value 160.000

Step 2. Formulas needed to solve the exercise.

Impairment loss = Carrying value - Fair Value

Step 3. Calculation.

Impairment loss = $310.000 - $116.000 = $194.000.

Step 4. Solution.

The carrying amount of $310.000 > fair value of $160.000. To measure the impairment loss, just do CV-FV. hence $310.000 - $116.000 = $194.000.

Loss on impairment $194.000

Patent $194.000

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Answer:

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Explanation:

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Alex, who is single, conducts an activity in 2021 that is appropriately classified as a hobby. The activity produces the followi
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Alex, who is single, conducts an activity in 2021 that is appropriately classified as a hobby.  The amount of income that Alex must report and the amount of the expenses he is permitted to deduct are:

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An activity or business  is classified as hobby :

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Based on the given information the revenues or income amount of $18,000 will be the  amount that will be reported by Alex  as part of the gross income.

While the expenses or  property taxed amount of $3,000 is deductible because the deductions are itemized deductions.

Inconclusion Alex, who is single, conducts an activity in 2021 that is appropriately classified as a hobby.  The amount of income that Alex must report and the amount of the expenses he is permitted to deduct are:

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Learn more here:

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Smith's electronics originally priced a private-label portable dvd player at $90, and then sold 1,500 units per week. after rais
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The following transactions apply to Ozark Sales for 2016:
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Answer and Explanation:

The preparation of the income statement for 2016 is shown below:-

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                               Income Statement

             For the Year Ended December 31, 2016

Sales revenue                             $510,000

Cost of goods sold                      $330,000

Gross margin                               $180,000

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Operating expenses    $78,000  

Warranty expenses     $10,200  

Total operating expenses          $88,200

Operating income                       $91800

Interest expense                         $667

Net income                                  $91133

b. The preparation of balance sheet for 2016 is shown below:-

                           OZARK SALES

                           Balance Sheet

                       As of December 31, 2016

Assets  

Cash                                              $284,600

Merchandise inventory                $50,000

Total assets                                   $334,600

Liabilities  

Accounts payable $130,000  

Sales tax payable  $8,800  

Notes payable        $50,000  

Warranties payable $4,000  

Interest payable      $667  

Total liabilities                      $193,467

Here, we added all liabilities to reach the total liabilities

Stockholders' equity  

Common stock      $50,000  

Retained earnings $91,133  

Total stockholders' equity               $14,1133

Total liabilities and stockholders'

equity                                                  $334,600

c. The Preparation of statement of cash flow is shown below:-

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                                Statement of Cash Flows

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Inflow from sales tax                  $40,800  

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Outflow for sales tax                -$32,000  

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Inflow from stock issue                $50,000

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That means that in total they are valued at,

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$54,600 is the total amount they will pay as dividends.

Dividends are taken from the Retained Earnings meaning that the balance in Retained earnings is therefore,

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$38,200 will be the balance in the retained earnings account after the dividend.

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