On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year.

On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchas

On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions.

Jan. 2 Purchased a patent (7-year life) $351,750.

July 1 Acquired a 10-year franchise; expiration date July 1, 2,032, $604,800.

Sept. 1Research and development costs $177,000.

(a) Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash. (Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Solutions

Expert Solution

ANSWER

Date	Account Titles and Explanation	Debit	Credit
Jan 2	Patent	351,750
	Cash		351,750

July 1	Franchise	604,800
	Cash		604,800

Sept 1	Research and development expense	117,000
	Cash		117,000

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

Exercise 9-15 On January 1, 2022, Sandhill Co. had a balance of $411,000 of goodwill on...

Exercise 9-15 On January 1, 2022, Sandhill Co. had a balance of $411,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill h indefinite life. During 2022, the company had the following additional transactions. Jan. 2 Purchased a patent (7-year life) $307,650. July 1 Acquired a 9-year franchise; expiration date July 1, 2,031, $576,000. Sept. 1 Research and development costs $178,500. Prepare the necessary entries to record the transactions related to intangibles. All costs incurred...

Balance sheet data for Kilroy Company for 2022 appears below: January 1, 2022 December 31, 2022...

Balance sheet data for Kilroy Company for 2022 appears below: January 1, 2022 December 31, 2022 ASSETS: Cash 27,000 43,000 Accounts receivable 39,000 26,000 Inventory 42,000 88,000 Prepaid insurance 21,000 29,000 Land 37,000 72,000 Equipment 61,000 94,000 Accumulated depreciation <14,000> <25,000> LIABILITIES + EQUITY: Accounts payable 33,000 41,000 Income taxes payable 21,000 15,000 Unearned revenue 25,000 39,000 Notes payable 51,000 75,000 Common stock 34,000 93,000 Retained earnings 49,000 64,000 Kilroy Company's 2022 income statement is given below: Sales revenue 329,000...

Balance sheet data for Kilroy Company for 2022 appears below: January 1, 2022 December 31, 2022...

On July 31, 2022, Pharoah Company had a cash balance per books of $6,320.00. The statement...

On July 31, 2022, Pharoah Company had a cash balance per books of $6,320.00. The statement from Dakota State Bank on that date showed a balance of $7.870.80. A comparison of the bank statement with the Cash account revealed the following facts. 1. The bank service charge for July was $21.00. 2. The bank collected $1,700.00 from a customer for Pharoah Company through electronic funds transfer. 3. The July 31 receipts of $1,377.30 were not included in the bank deposits for July. These...

Recording Goodwill upon Acquisition On January 1, 2020, the balance sheet of Naperville Company (a sole...

Recording Goodwill upon Acquisition On January 1, 2020, the balance sheet of Naperville Company (a sole proprietorship) was as follows. Assets Liabilities Accounts receivable (net of allowance) $96,000 Current $60,800 Inventory 144,000 Noncurrent 128,000 $188,800 Plant and equipment (net of depreciation) 320,000 Equity Land 48,000 Owners’ equity 419,200 Total $608,000 Total liabilities and owners’ equity $608,000 On January 1, 2020, Chicago Corporation purchased all of the assets and assumed all of the liabilities listed on the above balance sheet for...

Recording Goodwill upon Acquisition On January 1, 2020, the balance sheet of Naperville Company (a sole...

Recording Goodwill upon Acquisition On January 1, 2020, the balance sheet of Naperville Company (a sole proprietorship) was as follows. Assets Liabilities Accounts receivable (net of allowance) $120,000 Current $76,000 Inventory 180,000 Noncurrent 160,000 $236,000 Plant and equipment (net of depreciation) 400,000 Equity Land 60,000 Owners’ equity 524,000 Total $760,000 Total liabilities and owners’ equity $760,000 On January 1, 2020, Chicago Corporation purchased all of the assets and assumed all of the liabilities listed on the above balance sheet for...

C.S. Pharoah Company had the following transactions involving notes payable. July 1, 2022 Borrows $47,000 from...

C.S. Pharoah Company had the following transactions involving notes payable. July 1, 2022 Borrows $47,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2022 Borrows $50,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec. 31, 2022 Prepares adjusting entries. Feb. 1, 2023 Pays principal and interest to Lyon County State Bank. Apr. 1, 2023 Pays principal and interest to First National Bank. Prepare journal entries for each of the transactions. (Credit account...

A company had the following stockholders' equity section on its balance sheet on January 1, 2008:Common...

A company had the following stockholders' equity section on its balance sheet on January 1, 2008:Common stock, $2 par, 10,000 shares issued and outstanding$20,000 Paid-in capital in excess of par-common 40,000 Retained earnings 10,000 Total stockholders' equity $70,000 . All common shares were originally sold for $6 each. On February 16, the company reacquired 3,000 shares of common stock at $15 per share. 500 of these treasury shares were reissued at $20 on June 1 and 1,500 of these shares...

Martinez Company owns a building that appears on its prior year-end balance sheet at its original...

Martinez Company owns a building that appears on its prior year-end balance sheet at its original $572,000 cost less $429,000 accumulated depreciation. The building is depreciated on a straight-line basis assuming a 20-year life and no salvage value. During the first week in January of the current calendar year, major structural repairs are completed on the building at a $68,350 cost. The repairs extend its useful life for 5 years beyond the 20 years originally estimated. 1. Determine the building’s...

Oriole Company had the following assets on January 1, 2022. Item Cost Purchase Date Useful Life...

Oriole Company had the following assets on January 1, 2022. Item Cost Purchase Date Useful Life (in years) Salvage Value Machinery $74,000 Jan. 1, 2012 10 $ 0 Forklift 33,000 Jan. 1, 2019 5 0 Truck 39,400 Jan. 1, 2017 8 3,000 During 2022, each of the assets was removed from service. The machinery was retired on January 1. The forklift was sold on June 30 for $12,300. The truck was discarded on December 31. Journalize all entries required on...

Subjects