Question

In: Accounting

Assume that X incurs $180,000 in legal costs on March 1, 2017, to successfully defend a...

Assume that X incurs $180,000 in legal costs on March 1, 2017, to successfully defend a patent. The patent’s useful life is 12 years, amortized on a straight-line basis. The adjusting entry on December 31, 2017 is ------
Select one:
a. Dr. Depreciation expense $120,000 and Cr. Patent or Accumulated Amortization $120,000.
b. Dr. Depreciation expense $180,000 and Cr. Patent or Accumulated Amortization $180,000.
c. Dr. Amortization expense $12,500 and Cr. Patent or Accumulated Amortization $12,500.
d. Dr. Depreciation expense $16,000 and Cr. Patent or Accumulated Amortization $16,000.

Solutions

Expert Solution

Solution: Dr. Amortization expense $12,500 and Cr. Patent or Accumulated Amortization $12,500.

Working:

Particulars Debit Credit
Jan-01 Patents 180,000
Cash 180,000
(To record legal fees related to patent)
Dec-31 Amortization Expense (180,000 / 12 years) 15,000
Patents (or Accumulated Amortization) 15,000
(To record amortization of patent)

Nearest option selected


Related Solutions

Assume that X incurs $180,000 in legal costs on March 1, 2017, to successfully defend a...
Assume that X incurs $180,000 in legal costs on March 1, 2017, to successfully defend a patent. The patent’s useful life is 12 years, amortized on a straight-line basis. The adjusting entry on December 31, 2017 is ------ Select one: a. Dr. Amortization expense $12,500 and Cr. Patent or Accumulated Amortization $12,500. b. Dr. Depreciation expense $16,000 and Cr. Patent or Accumulated Amortization $16,000. c. Dr. Depreciation expense $180,000 and Cr. Patent or Accumulated Amortization $180,000. d. Dr. Depreciation expense...
Finch Corporation incurs the following annual fixed costs: Item Cost Depreciation $ 57,000 Officers’ salaries 180,000...
Finch Corporation incurs the following annual fixed costs: Item Cost Depreciation $ 57,000 Officers’ salaries 180,000 Long-term lease 80,000 Property taxes 14,000 Required Determine the total fixed cost per unit of production, assuming that Finch produces 3,000, 3,500, or 4,000 units. (Round your answers to 2 decimal places.)
assume a company incurs 100,000 for total variable costs and 150000 for total fixed costs to...
assume a company incurs 100,000 for total variable costs and 150000 for total fixed costs to produce 10000 units. what would the total cost be to produce 12000 units?
Trecek Corporation incurs research and development costs of $690,000 in 2017, 30 percent of which relate...
Trecek Corporation incurs research and development costs of $690,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert...
Trecek Corporation incurs research and development costs of $695,000 in 2017, 30 percent of which relate...
Trecek Corporation incurs research and development costs of $695,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to...
Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate...
Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert...
March 1, 2017, Goodman Co. began the manufacture of a new device known as “X”. Goodman...
March 1, 2017, Goodman Co. began the manufacture of a new device known as “X”. Goodman installed a standard costing system in accounting for manufacturing costs of its product X. The standard costs for one unit of X are as follows: Raw materials:              6 lbs. @ $1 per lb.* …………………….         $6.00 Direct labor:                  1 hour @ $4 per hour* …………………. 4.00 Overhead:                     75% of direct labor costs ……………… 3.00 * According to the standard: - One unit of X requires...
Tim opened the Emporium on March 1, 2017. During March, the following transaction were completed: March...
Tim opened the Emporium on March 1, 2017. During March, the following transaction were completed: March 1   Issued 10,000 shares of common stock for $25,000 cash March 1    Purchased used servers for $10,000, paying $6,000 cash and the balance on account March 3    Purchased office supplies for $1,500 on account March 5    Paid $2,400 cash on 1-year insurance policy effective March 1 March 14   Billed customers $4,200 for data analysis services March 18   Paid $1,500 cash on amount owed...
Accelerated Depreciation Koffman's Warehouse purchased a forklift on January 1, 2017, for $180,000. The forklift is...
Accelerated Depreciation Koffman's Warehouse purchased a forklift on January 1, 2017, for $180,000. The forklift is expected to last for five years and have a residual value of $11,000. Koffman's uses the double-declining-balance method for depreciation. Required: 1. Calculate the depreciation expense, accumulated depreciation, and book value for each year of the forklift's life. If necessary, round any depreciation calculations to the nearest dollar. Year Annual Depreciation Accumulated Depreciation Book Value 2017 $ $ $ 2018 2019 2020 2021 2....
A business incurs the following costs: • Labor: $125/unit • Materials: $40/unit • Rent: $450,000/month Assume...
A business incurs the following costs: • Labor: $125/unit • Materials: $40/unit • Rent: $450,000/month Assume the firm produces 2 million units per month. The total variable cost, per month, is _______ million. The total fixed cost, per month, is ______ million. The total cost is ________ million.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT