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Andrej [43]
3 years ago
5

During 2013, Winston Corporation spent $170,000 in research and development costs. As a result, a new product called the New Age

Piano was patented. The patent was obtained on October 1, 2013, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $18,000 related to the patent were incurred as of October 1, 2013. Partially correct answer. Your answer is partially correct. Try again. Prepare all journal entries required in 2013 and 2014 as a result of the transactions above.
Business
1 answer:
Musya8 [376]3 years ago
4 0

Answer:

(A)

Development 170,000 debit

   Cash                                   170,000 credit

to recognize development cost

(B)

New Age Piano patent 188,000 debit

   Development                          170,000 credit

   Cash                                          18,000 credit

to record the patent of the new product

(C)

Amortization expense  4,700 debit

  New Age Piano patent          4,700 credit

to record amortization for the year 2013

(D)

Amortization expense  18,800 debit

  New Age Piano patent          18,800 credit

to record amotization for the year 2014

Explanation:

(A) The development cost are capitalized

(B) We should capitalize all the cost necesary to the use of the patent

So we add both, the development and the legal fees

170,000 development and research

 18,000 legal fees

188,000 total

(C)

<u>Striaght-line amortization </u>

188,000 / 10 year = 18,800 amortization per year

We use the useful life, not the legal life, as the product will be used for this period.

partial amortization for 2013

18,800 x 3/12 = 4,700

(D)

amortization for 2014

18,800 complete year

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kramer

Answer:

a. Account receivable and sales are understated.

Adjusting entry :

Accounts Receivable (Dr.) $21,000

Sales Revenue (Cr.) $21,000

b. Interest receivable is understated.

Adjusting Entry :

Interest Receivable (Dr.) $470

Interest Earned (Cr.) $470

c. Account receivable and sales are understated.

Adjusting entry :

Accounts Receivable (Dr.) $1,460

Sales Revenue (Cr.) $1,460

Explanation:

Adjusting entries will be created for the transactions that are not properly recorded or either completely not recorded. In the given case the customer is not billed for the services rendered. This has an impact on the asset account of the company because account receivable are understated.

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3 years ago
A grocery chain is considering the installation of a set of 4 self-checkout lanes. The new self-checkout lane setup will replace
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Answer:

a. 2560 checkout

b. 3072 checkout

c. Old system = 3.85 checkout/$

New system = 5.56 checkout/$

Explanation:

Given:

Checkout lanes = 4

a.

How many checkouts did the old system provide in a shift?

Given

Lanes = 2

Time in use = 16 hours --- Convert to seconds

Time = 16 * 3600 = 57600 seconds

Checkout = 1 per 45 seconds

Number of check outs is calculated as:

2 lanes * 57600 seconds * 1 checkout / 45 seconds

Number of checkout = 2560 checkouts

b.

How many checkouts does the new system provide?

Lanes = 4

TimeTime in use = 16 hours --- Convert to minutes

Time = 16 * 60 = 960 minutes

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4 lanes * 960 minutes * 1 checkout / 1.25 minutes

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c.

Given

Electricity costs for both setups are $0.06 per checkout

Bagging (material) costs are $0.12 per checkout with the old system

Bagging (material) costs are $0.20 per checkout with the old system

Cost for the old system is calculated by:

$0.06 * 2560 + $0.12 * 2560

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0.06 * $3072 + 0.20 * $3072

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3 years ago
You and a group of your friends have been discussing your portfolios at the company water cooler. Your discussion has centered o
creativ13 [48]

Answer:beta

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Beta is a component of the capital asset pricing model (CAPM), which is used to calculate the cost of equity funding. The CAPM formula uses the total average market return and the beta value of the stock to determine the rate of return that shareholders might reasonably expect based on perceived investment risk. In this way, beta can impact a stock's expected rate of return and share valuation.

Beta is calculated using regression analysis. Numerically, it represents the tendency for a security's returns to respond to swings in the market. The formula for calculating beta is the covariance of the return of an asset with the return of the benchmark divided by the variance of the return of the benchmark over a certain period.

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Answer:

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The depreciation rate under this method is,

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The depreciation for the Year 2015 and 2016 under the units of production method is,

2015 = 20 * 2400 = $48000

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The accumulated depreciation at the end of 2016 is = 48000 + 42000 = $90000

The carrying value at the end of 2016 is = 240000 - 90000 = $150000

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Answer:

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