Prepare the intangible assets section of the companys

Assignment Help Accounting Basics
Reference no: EM13485688

A Company entered into a franchise agreement to operate a franchised location beginning on January 1, 2014. The terms of the agreement were that the initial franchise fee was $120,000 to be paid in 5 equal annual payments of $24,000 beginning on January 1, 2014. In addition, the Company must pay the franchisor 7% of the Company's revenue from the operation of the franchise each year. The Company estimates the useful life of this franchise to be 8 years. The appropriate discount rate for the Company is 10%. The present value of the annual payments to be paid beginning on January 1,2014 is $100,077. During 2014 the Company realized revenue in the total amount of $1,080,000 from the operation of the franchise.

On January 1, 2013 the Company was granted a patent. The Company incurred a total of $59,724 in experimental and development costs. In addition, the company spent $8,960 in legal fees and other costs to register the patent. The patent is expected to have a useful life of 10 years.

The Company purchased a copyright on June 1, 2011 for a total cost of $33,000 and with an estimated useful life of 15 years. On June 1, 2014 the company successfully defended a copyright infringement law suit at a cost of $8,300.

Instructions:

A.Prepare the intangible assets section of the Company's balance sheet as of December 31, 2014. Show supporting calculations in good form.

B.In good form, prepare a schedule showing all expenses resulting from the transactions that would appear on the Company's income statement for the year ending December 31, 2014. Show supporting calculations in good form.

Reference no: EM13485688

Questions Cloud

Francis bacon believed that you should read neither to : 1- francis bacon believed that you should read neither to contradict nor believe but rather to weigh and evaluate.2-
How is increasing leverage affecting financial performance : the connecticut computer company has the following selected financial results.nbsp10 debt40 debt75 debtdebt
A companys perpetual preferred stock currently trades at 80 : a companys perpetual preferred stock currently trades at 80 per share and pays a 6.00 annual dividend per share. if the
Clark international produces designer watches each watch : clark international produces designer watches. each watch requires materials worth 14.50 and three direct labor hours.
Prepare the intangible assets section of the companys : a company entered into a franchise agreement to operate a franchised location beginning on january 1 2014. the terms of
What is the appropriate measure for the risk according to : what is the appropriate measure for the risk according to thecapitol asset pricing model
Which of the following best describes the typical : 1. applied overhead of a company exceeds actual overhead when thea.overhead account has a credit balanceb. journal
Of the cu risks and disadvantages which do youbelieve is : of the cu risks and disadvantages which do youbelieve is the most concerning and why? despite these risksmany people
Assume a ten-year life and a 10 internal rate of return : assume polaris invested 2.12 million to expand its manufacturing capacity. assume that these projects have a ten-year

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  In a recent period 13000 units were produced and there was

in a recent period 13000 units were produced and there was a favorable labor efficiency variance of 23000. if 40000

  Declaration of a liquidating dividend by a corporation

How would the declaration of a liquidating dividend by a corporation affect each of the following?

  What is the amount of interest revenue recognized by seller

on june 8, alton co. issued an 80,000, 6%, 120 day note payable to seller co. assume that the fiscal year seller co ends june 30. using the 360 day year in your calculations, what is the amount of interest revenue recognized by seller in following..

  Accordance with professional pronouncements

For which of the segments would information have to be disclosed in accordance with professional pronouncements? A. Segments A, B, C, and D b. Segments A, B, and C c. Segments A and B d. Segments A and D 57. In January 2011, Post, Inc.

  Calculate the amount of gross profit

Calculate the amount of gross profit (loss) to be recognized in each of the three years, assuming the following costs incurred and costs to complete information.

  How would the company aftertax cash inflow be affected

How would the company's aftertax cash inflow be affected if (a)it donated the land or (b) it sold the land for $110,000? How would its net income be affected?

  Calculate the net cash flow from financing activities for

the following accounts among others apeared on zz companys balance sheet at january 1 2005 and december 31 2005

  In order to make the appropriate decision the manager

a company purchased goods on credit with credit terms of 315 n45. although the company does not have cash available to

  How can purchasing help to reduce cycle time how can more

1 how can purchasing help to reduce cycle time?2 how can more innovation from suppliers be achieved? what is

  Fasb codification-inventory research

What is the formal definition in the glossary of the term "Inventory?" What is the Codification topic number for inventory? What types of entities are not covered by the guidance in the Inventory Topic? (Provide the Codification reference for your ..

  The company look like a risk-free investment

In the mid-2000s Fannie Mae was in severe financial difficulty and desperately needed additional capital for the company to survive.

  Ingrid are equal partners in the ghi partnership

George, Harriet and Ingrid are equal Partners in the GHI Partnership. George's Adjusted Basis (AB) in his Partnership Interest is $40,000, Harriet's is $60,000 and Ingrid's is $20,000. The Partnership distributes property to George which has ..

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