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saul85 [17]
3 years ago
5

Van Frank Telecommunications has a patent on a cellular transmission process. The company has amortized the $18.90 million cost

of the patent on a straight-line basis since it was acquired at the beginning of 2017. Due to rapid technological advances in the industry, management decided that the patent would benefit the company over a total of six years rather than the nine-year life being used to amortize its cost. The decision was made at the end of 2021.
Required:
Prepare the appropriate adjusting entry for patent amortization in 2013 to reflect the revised estimate.
Business
1 answer:
Savatey [412]3 years ago
7 0

Answer:

The appropiate Journal Entry would be the following:

Amortization Expense Dr. $5.25  million

                                     Patent Cr. $5.25 million

Explanation:

According to the given data, we have the following:

Original Cost of patent = $18.90 million

Hence, Annual Amortization (Old) = 18.90/9 = $2.1 million

Amortization till Date (2017 - 2021) = 2.1*4 = $8.4 million

Hence, Unamortized Value = 18.90 - 8.4 =$ 10.5 million

Also, Remaining Life = 6 - 4 = 2 Years

Therefore, The New Amortization = Unamortized Value/Remaining Life = 10.5/2 = $5.25 million

The appropiate Journal Entry would be the following:

Amortization Expense Dr. $5.25  million

                                     Patent Cr. $5.25 million

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3 years ago
Cardinal Corporation is a trucking firm that operates in the mid-Atlantic states. One of Cardinalâs major customers frequently s
pychu [463]

Answer:

cardinal corporation is unethical in its business operation.

Explanation:

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3 years ago
A federal bank examiner came to a bank in Jacksonville. He audited the books and he checked out the staff and the office facilit
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Eminent domain for the public good.

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3 years ago
Ivanhoe Company issued $492,000 of 10%, 20-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and
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Answer:

Explanation:

For  answer , see the attached file.

Download docx
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3 years ago
Your company currently has par, coupon bonds with 10 years to maturity and a price of . If you want to issue new 10-year coupon
vovangra [49]

Answer:

I looked for the missing numbers and found the following question:

Your company currently has $1,000 ​par, 6.5% coupon bonds with 10 years to maturity and a price of $1,078. If you want to issue new​ 10-year coupon bonds at​ par, what coupon rate do you need to​set? Assume that for both​ bonds, the next coupon payment is due in exactly six months.

We need to calculate the yield to maturity (YTM) of the current bonds. Since the bonds pay interests every 6 months, then the coupon = $32.50

YTM = {coupon + [(face value - market value)/n]}/[(face value + market value)/2]

YTM = {32.5 + [(1,000 - 1,078)/20]}/[(1,000 + 1,078)/2]

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In order to sell the new bonds at par, the coupon rate must be 5.51%

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