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Dominik [7]
3 years ago
11

On December 31, it was estimated that goodwill of $6,000,000 was impaired. In addition, a patent with an estimated useful econom

ic life of 12 years was acquired for $1,500,000 on April 1. A. Journalize the adjusting entry on December 31 for the impaired goodwill. Refer to the Chart of Accounts for exact wording of account titles. B. Journalize the adjusting entry on December 31 for the amortization of the patent rights. Refer to the Chart of Accounts for exact wording of account titles.
Business
1 answer:
murzikaleks [220]3 years ago
5 0

Answer:

loss on impairment X debit

goodwill X credit

patent expense 125,000 credit

   patent                             125,000 credit

Explanation:

<em><u>goodwill:</u></em>

the amount of the impaired is missing. However the entry will loss on impairment debit, because it is an expense

and the goodwill will be credited, because the asset is decreasing

<em><u>patent:</u></em>

we will do amortization like it was the depreciation on a car, the diference will be that we on't use a contra-asset account (accumulated deperciation car) we will directly decrease patent account

patent acquisition 1,500,000

economic life 12

purchase/ economic life = striaght-line amortization

1,500,000/12 = 125,000

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You are given the following information for O'Hara Marine Co.: sales = $75,500; costs = $35,200; addition to retained earnings =
pshichka [43]

Answer:

O'Hara Marine Co.

Depreciation Expense is:

$13,903

Explanation:

a) Data and Calculations:

sales = $75,500;

costs = $35,200;

addition to retained earnings = $9,580;

dividends paid = $8,420;

interest expense = $2,620;

tax rate = 23 percent

Net Income:

addition to retained earnings = $9,580;

dividends paid = $8,420

Total net income = $18,000

Pre-tax Income = $18,000/0.77 = $23,377

Income tax (23%) of $23,377 = $5,377

After Tax Income = $18,000 ($23,377 - 5,377)

Depreciation:

sales = $75,500

costs = $35,200

Gross profit =     $40,300

Less interest         (2,620)

Less net income  (23,777)

Depreciation =    $13,903

6 0
3 years ago
The 7 percent bonds issued by Modern Kitchens pay interest semiannually, mature in eight years, and have a $1,000 face value. Cu
shtirl [24]

Answer: 6.5%

The yield to maturity is 6.496% (approximated to 6.5% to nearest tenth)

Explanation:

Using the formula (semi annually YTM)

YTM = C + (fv - pv) /t ÷ (fv + pv)/2

C= coupon rate = 7%(1000)= $70

fv = face value = $1,000

pv = price value = $1,032

t = Time to maturity in years = 8years

C + (fv - pv) /t = 70 + (1000–1032)/8

= 70 – (32 /8) =66

(fv + pv) /2 = (1000 + 1032) /2

= 2032 / 2

= 1016

YTM = 66 / 1016

YTM = 0.06496

In % = (6496 / 100,000) × 100

= 6.496%

Approximately.... 6.5%

8 0
3 years ago
Which of the following statements is CORRECT?a. If the cost of capital declines, this lowers a project's NPV.b. The NPV method i
AleksAgata [21]

Answer:

Both C and D statements are correct

Explanation:

3 0
3 years ago
Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar
dimulka [17.4K]

Answer: Remeasurement loss of $‭21,970

Explanation:

The figures will have to be converted from Euros to US$ for the calculation.

The relevant exchange rate will be the rate on the date of the transaction.

                                                              Amount      Exchange rate    $Amount

Opening cash                                     528,000           1.14                   ‭601,920‬

Increase in Cash assets:

Sale of inventory                                 160,000             1.20                192,000

                                                            688,000                                   793,920‬

Decrease in cash assets:

Acquisition of warehouse                 300,000             1.14                (342,000)

Purchase of inventory                       100,000              1.18                (118,000)

Transfer to parent                              10,000                1.18                 (11,800)

Ending net cash assets                     278,000 ‭                                  322,120‬

Remeasurement gain(loss) at 31 December = Ending net cash assets at current rate - Ending net cash assets

= (278,000 * 1.08) - 322,120

= ‭300,240‬ - 322,120

= ($21,970)

<em>Options are not for this question. </em>

7 0
3 years ago
On January 1, Year 1, Eureka Company issued $290,000 of 4-year, 5% bonds at face value. The annual cash payment for interest is
zhannawk [14.2K]

Answer:

$304,500

Explanation:

Interest payable on December 31, year 1 = $290,000 * 5%

Interest payable on December 31, year 1 = $14,500

Total amount of liabilities to be reported on the Balance Sheet, year 1:

= $290,000 + $14,500

= $304,500

So, the total amount of liabilities related to these bonds that will be reported on the balance sheet at December 31, Year 1 is $304,500.

5 0
3 years ago
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