How the oil-extraction patent should be carried on the firm

Assignment Help Accounting Basics
Reference no: EM132186686

Question - On January 1, 2016, Harris Company acquired a patent on a particular oil extraction technique for $6.25 million. The patent was expected to have a 10-year life and no residual value. On December 31, 2017, Harris determined its expected future cash flows from the patent were $750,000 per year for each of the next eight years. The present value of these flows, discounted at Harris' market interest rate, is $3.5 million. Note that Harris uses straight-line amortization for patents. Given this information, the oil-extraction patent should be carried on the firm's December 31, 2017, balance sheet at an amount of

A: $6 million.

B: $3.5 million.

C: $5 million.

D: $6.25 million.

Reference no: EM132186686

Questions Cloud

Has anyone passed the argosy mafp comps exam : Has anyone passed the Argosy MAFP (forensic psych) Comps exam? I have failed twice and only have one more chance. Unless you have passed before.
What will be the number of shares outstanding after split : Jonick Corporation had 26,000 shares of common stock outstanding, What will be the number of shares outstanding after the split
Diversification-differentiation can be powerful strategies : Diversification/differentiation can be very powerful strategies--being that if one facet of the enterprise falters,
Write about what you remember about your early childhood : Write about what you remember about your early childhood, from 2 to 6 years of age (e.g. did you go to preschool? Who did you play with?
How the oil-extraction patent should be carried on the firm : Given this information, the oil-extraction patent should be carried on the firm's December 31, 2017, balance sheet at an amount of
Calculate total revenue and profit at breakeven number : Calculate the Total Revenue and Profit at this breakeven number.
Strategy contributed to the firm growth : How has Wal-Mart grown from a small region chain to the largest discount retailer in the world? How has its strategy contributed to the firm’s growth?
Prepare the issuer journal entry to record the issuance : The company received $484,087 in cash proceeds. Prepare the issuer's journal entry to record the issuance of the bond
Why did their enactment of policy of exclusively promoting : Why did their enactment of a policy of exclusively promoting from within the organization reduce their turnover problem in these supervisory roles ?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Create statement of comprehensive income for the year ended

Based on the Adjusted Trial Balance (attached) you required to create the following financial statements: Statement of Comprehensive Income for the year ended

  Compute operating cash flows using the indirect method

Operating Cash Flows: Indirect Method Blaylock Company provided the following partial comparative balance sheets and the income statement for 2012.

  What is a definition of sustainability reporting

This activity will introduce you to sustainability accounting. What is definition of sustainability reporting. Who are stakeholders of sustainability reporting

  Determine the amount of joel palks capital as of first july

D'Lite Dry Cleaners is owned and operated by Joel Palk. Determine the amount of Joel Palk's capital as of July 1 of the current year.

  Discuss four issues that may challenge existing policies

Discuss four issues that may challenge existing policies and procedures of the consolidation process

  Depreciation expense on the asset

The activity method will be used for depreciation. What is the depreciation expense on this asset?

  How much raw material was used in september

During the month of September, the company purchased $114,000 of raw materials. How much raw material was used in September

  Journal entry to record pension expense

Compute the amount of pension expense to be reported for 2008 (show computations) Prepare the journal entry to record pension expense and the employer's contribution for 2008. Assume no new actuarial gains/losses were experienced and that actual re..

  What must partner B include in taxable income

If the new partnership subsequently sells the securities at their FMV of $48,000, what must partner B include in taxable income

  Group of prospective investors

As a member of top management, would you prefer to rely n the statement in (b) above or in (3) above when meeting with a group of prospective investors? Reconcile the absorption costing and variable costing net operating incomes in (2) and (3) abo..

  Prepare the journal entry to record chavez weekly vacation

Chavez Co.'s salaried employees earn four weeks' vacation per year. Prepare the journal entry to record Chavez's weekly vacation benefits expense

  Compute the book value at the end of the second year

Cole Camping Company, Inc. uses the double-declining-balance method of depreciation. Compute the book value at the end of the second year

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd