Prepare the journal entry to amortize patent at year end

Assignment Help Business Economics

Reference no: EM13852793

(a) Tandem Industries purchased a patent on January 1, 2014, for $2,000,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. On June 30, 2014, the company paid legal costs of $135,000 in successfully defending the patent in an infringement suit. Prepare the journal entry to amortize the patent at year end on December 31, 2014.

(b) Seminole Partners purchased a franchise from Unhealthy Food Company for $400,000 on January 1, 2014. The franchise is for an indefinite time period and gives Seminole Partners the exclusive rights to sell Unhealthy Chicken Wings in a particular territory. Record the journal entry to record the acquisition of the franchise and any necessary adjusting entry at year end on December 31, 2014.

(c) Young Corporation incurred research and development costs of $500,000 in 2014 in developing a new product. Record the necessary journal entries during 2014 to record these events and any adjustments at year end on December 31, 2014.

Comment

Reference no: EM13852793

Questions Cloud

Calculate romanias population level : If the population of Romania was about 22 million in 2010 and the average population growth rate is 0.2 percent, then calculate Romania’s population level in 1970.

Average inflation rate : Between 1970 and 1976, average inflation rate of Country X was about 35 percent per year. With that rate of inflation, prices would double about every ________ using the rule of 70.

Complete the templates selling price : Complete the templates Selling price & GM - Markup and Revenue, COGS, GM template.

Is the market currently over or under producing this good : Suppose that demand for a product is Q = 1000 – P and supply is Q = 9P. Furthermore, suppose that the marginal external damage of this product is $20 per unit. Suppose this is a negative production externality. Calculate the Q currently being produce..

Prepare the journal entry to amortize patent at year end : Tandem Industries purchased a patent on January 1, 2014, for $2,000,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. Seminole Partners purchased a fran..

Development of a strategic plan for a business : Is strategic planning as important for a small company as for a large company? Why or why not? How would you approach the development of a strategic plan for a business you own

Derive an expression for average cost : Derive an expression for average cost. Derive an expression for marginal costs. Is there any range of production characterized by scale of economies? At what production level are scale economies exhausted?

How much will be demanded after the new copayment : Currently, there is a $0.50 copayment on drugs. The HMO has decided to raise this to $1.00 per prescription. The cost of a prescription is $6.00, which mean the HMO's contribution to the total cost will fall from $5.50 to $5.00. How much will be dema..

What is your prediction of the long run effects : NY state will soon implement a $15/hour minimum wage for fast food workers. What is your prediction of the short run effects of this policy? What is your prediction of the long run effects?

User Account

All Pages