Answer:
Scenario 1.
Explanation:
According to the scenario, computation of the given data are as follow:-
Patent:- Patent is a intellectual property that gives the right to its owner to making, using and selling the invention and transfer that right to others too. Patent has their legal life.
Research and development cost:- Research and development cost is an intangible assets which incurred by company.
1st Scenario:- Manufacturer spends $450,000 on research and development cost. It is an expenses. It will not the cost of oven.
2nd Scenario:- Because patent purchased by the third party so no research & development cost incurred on the patent.
According to the analysis when we compared scenario 1 and scenario 2, company will report high research and development expenses in Scenario 1.
Answer:
$29,648.12
Explanation:
For computing the net cash flow from the sale, first we have to compute the book value and loss or gain on sale which is shown below:
Book value on selling date = Purchase Cost - Accumulated depreciation for two years
= $62,800 × (1 - 0.2 - 0.32)
= $62,800 × 0.48
=$30,144
Now the loss on sale would be
= Book value - sale price
= $30,144 - $29,500
=$644
So, the net cash flow would be
= Sale value of fixed assets + (loss on sale of fixed assets × firm Tax rate)
= $29500 + ($644 × 23%)
= $29,500 + $148.12
= $29,648.12
Answer:
Dr Income Summary $237,000
Cr Farmer, Capital $162,000
Cr Taylor,Capital $75,000
Explanation:
Preparation of the journal entry to allocate net income
Based on the information given in a situation where their partnership agreement calls for Farmer to receive the amount of $87,000 per year salary in which the remaining income or loss is to be divided equally among them which means that Assuming the net income for the current year is the amount of $237,000, the journal entry to allocate the net income is:
Dr Income Summary $237,000
Cr Farmer, Capital $162,000
($237,000-$75,000)
Cr Taylor,Capital $75,000
[($237,000-$87,000)/2]
