30 points please help!

For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record

Montano1993 [528]

Answer:

(a) Debit Amortization expense - Patents for $43,750; and Credit Patents for $43,750.

(b) Debit Amortization expense - Patents for $5,230; and Credit Patents for $5,230.

(c) Debit Amortization expense - Franchise for $14,000; and Credit Franchises for $14,000.

Explanation:

(a) A patent with a 10-year remaining legal life was purchased for $350,000. The patent will be commercially exploitable for another eight years.

Annual amortization expenses = Purchase cost of the patent / Number of commercially exploitable years = $350,000 / 8 = $43,750

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - Patents 43,750

Patents 43,750

(To record patent amortization.)

(b) A patent was acquired on a device designed by a production worker. Although the cost of the patent to date consisted of $52,300 in legal fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 10 years and is currently worth $400,000.

Annual amortization expenses = Legal fees / Remaining legal life = $52,300 / 10 = $5,230

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - Patents 5,230

Patents 5,230

(To record patent amortization.)

(c) A franchise granting exclusive distribution rights for a new solar water heater within a three-state area for five years was obtained at a cost of $70,000. Satisfactory sales performance over the five years permits renewal of the franchise for another three years (at an additional cost determined at renewal).

Annual amortization expenses = Cost of acquiring the franchise / Number of years acquired = $70,000 / 5 = $14,000

Therefore, the journal entries will look as follows:

General Journal

Description Debit ($) Credit ($)

Amortization expense - franchise 14,000

franchise 14,000

(To record franchise amortization.)

4 0

3 years ago

Which of the following contingent liabilities would require a company to record a note to the financial statements

SOVA2 [1]

The following contingent liabilities would require a company to record a note to the financial statements:-

a.) The liability is possible and cannot be reasonably estimated.

b.) The liability is probable and cannot be reasonably estimated.

c.) The liability is possible and is estimated to be $35,000.

Correct answer is option 1 , 2 & 4 .

Eligible contingent liabilities are recognized as expenses on the income statement and as liabilities on the balance sheet. If the chance of accidental loss is low, i. H. With a probability of less than 50%, the liability should not be recognized on the balance sheet.

Contingent liability is disclosed when it is likely that a transfer of economic benefits will be required to resolve it without making a provision.

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Your question is incomplete. please read below to find the full content.

Which of the following contingent liabilities would require a company to record a note to the financial statements

The liability is possible and cannot be reasonably estimated.

The liability is probable and cannot be reasonably estimated.

The liability is remote and estimated to be $15,000.

The liability is possible and is estimated to be $35,000.

The liability is remote and cannot be estimated.

The liability is probable and estimated to be $40,000.

3 0

2 years ago

_____ are specialized internet sites where b2b buyers and sellers exchange products and services.

BigorU [14]

Torrent is the awnser

4 0

4 years ago

Which of the following statements is correct regarding variable costing and absorption costing income statements for a company t

Arturiano [62]

Answer: Option (A) is correct.

A basic difference between absorption and variable costing is that the absorption costing approaches fixed factory overhead as a product cost, while variable costing approaches the same as a period cost.

Where production of inventory outpaces sales, fixed factory overhead under absorption costing approach will remain on balance sheet as unsold inventory; therefore keeping the costs off of income statement until inventory is sold. Whereas; under variable costing, fixed factory overhead will be expended to the income statement in given period .

8 0

3 years ago

Kay has decided to take out a $23,100 loan, and she wants to pay it back in quarterly installments. She has narrowed her options

fredd [130]

Answer:

The loan offered by bank W charges the most, $722.25 + $3,902.20 = $4,632.45.

The loan offered by bank V charges, $822.45 + $3,466 = $4,288.45

Loan W has $336 more in financial charges.

Explanation:

If Kay decides to take the loan form bank V, he will have to pay the initial service charge of $822.45, plus 24 quarterly installments of $1,106.92 each. The total interest charged by the bank will be $3,466

If he decides to take the loan form bank W, he will have to pay the initial service charge of $722.25, plus 36 quarterly installments of $843.82 each. The total interest charged by the bank will be $3,901.20.

5 0

4 years ago

Read 2 more answers