Which of the following is NOT a factor in selecting a pricing method?

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

What is the difference between a government and a state

nadezda [96]

Though here are few differences between State and Government, State is a sovereign authority. While Government uses the sovereign authority of the state as an element. ... State is a larger entity is includes all individuals, associations and institutions that exist within its territorial boundaries.

6 0

3 years ago

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Sam takes a five-dollar bill from his wallet. He exchanges the bill for four quarters and four one-dollar bills. He then uses th

s344n2d4d5 [400]

Answer: Acceptability, portability and divisibility of money.

Explanation:

The question illustrates the acceptability, portability and the divisibility of money. The acceptability of money means that money is widely accepted as a medium for transaction, divisibility of money means that money can be broken down to smaller denominations and the portability of money means that money is easy to carry about.

7 0

3 years ago

You want to measure the impact of the media in some way. You sample several advice columns found in "Playboy" and "Playgirl" and

jarptica [38.1K]

Answer:

The correct answer is: content analysis.

Explanation:

Content analysis is a research method used to find repetitive patterns in mediums of communication portraying the different types of content such as reviews, images, audio or video. Content analysis has mainly been used in social studies but it is being implemented in business applied to marketing techniques in an attempt to spot consumer patterns.

5 0

3 years ago

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what is the value of a share of common stock using the corporate valuation approach for a company that has outstanding debt and

valentina_108 [34]

Answer:

The current and past missed preferred stock dividend payments must be made before a common stock dividend payment can be made.

Explanation:

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3 years ago