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- Using the information below for Baxter Corporation, prepare all necessary journal entries ONLY on December 31, 2021, 2022, and 2023. If no entry is needed, write “No entry.” (Dates are all correct!!) Show all computations below. • Baxter Corporation purchases a copyright in January 2020 for $500,000, incurring legal costs of $50,000. The copyright has a legal life of 25 years and an estimated useful life of 10 years. • In January 2022, Baxter successfully defended its copyright, incurring $75,000 in legal fees. The estimated useful life remains the same. • During 2023, based on new marketing research, Baxter determines that the fair value of the copyright is $400,000. Estimated total future cash flows from the copyright are $425,000. Record any impairment loss and adjusting entry on December 31, 2023. No change in estimated useful life.On October 12, 2023, Simarov, Inc. purchases a Copyright to a song, written by a person who died on October 12, 1963 for $50,000 cash. Simarov believes they will be able to generate revenue from the Copyright for the remaining useful life. Prepare the journal entry to record the purchase. DR: CR: What is the remaining useful life of the Copyright? How much amortization expense will Simarov record each year? years Prepare the adjusting journal entry to record one year's amortization. DR: CR: What is the Net Book Value of the Copyright on October 1, 2027?Sinise Industries acquired two copyrights during 2020. One copyright related to a textbook that was developed internally at a cost of $9,900. This textbook is estimated to have a useful life of 3 years from September 1, 2020, the date it was published. The second copyright (a history research textbook) was purchased from University Press on December 1, 2020, for $24,000. This textbook has an indefinite useful life. How should these two copyrights be reported on Sinise's balance sheet as of December 31, 2020?
- On January 1, 2020, Ella Company acquired the following intangible assets: • A trademark for P2,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without a problem. • A patent for P4,000,000. Because of market condition, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years. On December 31, 2020, the intangible assets are assessed for impairment. Because of a decline in the economy, the trademark is expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 annually for each of the next four years. The appropriate discount rate for all intangible assets is 8%. Ella Company shall recognized a total impairment loss in 2020 at a. P2,045,000 b. P1,545,000 c. P2,845,000 d. P1,980,000On January 1, 2020, Ella Company acquired the following intangible assets:• A trademark for P2,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without a problem.• A patent for P4,000,000. Because of market condition, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years.On December 31, 2020, the intangible assets are assessed for impairment. Because of a decline in the economy, the trademark is expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 annually for each of the next four years.The appropriate discount rate for all intangible assets is 8%. Ella Company shall recognized a total impairment loss in 2020 at If the entity is an SME, what is the carrying value of the…On January 1, 2020, Ella Company acquired the following intangible assets: • A trademark for P2,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without a problem. • A patent for P4,000,000. Because of market condition, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years. On December 31, 2020, the intangible assets are assessed for impairment. Because of a decline in the economy, the trademark is expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 annually for each of the next four years. The appropriate discount rate for all intangible assets is 8%. Ella Company shall recognized a total impairment loss in 2020 at a. P2,045,000 b. P1,545,000 c. P2,845,000 d. P1,980,000…
- On September 30, 2019, Leeds LTD. acquired a patent in conjunction with the purchase of another company. The patent, valued at $6 million, was estimated to have a 10-year life and no residual value. Leeds uses the straightline method of amortization for intangible assets. At the beginning of January 2021, Leeds successfully defended its patent against infringement. Litigation costs totaled $500,000.Required:1. Calculate amortization of the patent for 2019 and 2020.2. Prepare the journal entry to record the 2021 litigation costs.3. Calculate amortization for 2021.4. Repeat requirements 1–3 assuming that Leeds prepares its financial statements according to IFRS.Mystic Pizza Company purchased a patent from Prime Pizza Plus on January 1, 2019, for 72,000. The patent has a remaining legal life of 9 years. Prepare the journal entries to record the acquisition and the amortization for 2019, assuming Mystic Pizza amortizes its patents using the straight-line method over the life of the asset.Conrad Inc. purchased a patent for $1,000,000 for a specialty line of patented switch plate covers and outlet plate covers specifically designed to light up automatically when the power fails. Assume the switch plate patent was purchased January 1, 2020, and it is being depreciated over a period of ten years. Assume that Conrad Inc. does not use an accumulated amortization account but instead charges amortization directly against the intangible asset account. Required: 1. This part of the question is not part of your Connect assignment. 2. Prepare the journal entries to record the purchase and amortization of the switch plate patent in 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the purchase of patent. Note: Enter debits before credits. Event a General Journal Debit Credit View general journal Record entry Clear entry
- Ayayai Corporation purchases a patent from Blossom Company on January 1, 2025, for $63,000. The patent has a remaining legal life of 14 years. Ayayai estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Ayayai's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation (To record purchase of patents) (To record amortization of patents) Debit CreditSami company acquired a patent on October 1, 2020. Sami paid cash of $55,000 to the seller. registration fees of $5,000 were paid related to the acquisition. On the same date, Sami paid $5,000 advertising expense. The patent has a useful life of 10 years. What is the amount of patent to be reported at the statement of financial position on 31/12/2021? a- 55000 b- 60000 c- 50000 d- 52500Taylor Swift Corporation purchases a patent from Salmon Company on January 1, 2025, for $54,000. The patent has a remaining legal life of 16 years. Taylor Swift estimates the patent will have a useful life of 10 years, based on expected product innovations in the market. Prepare Taylor Swift's journal entries to record the purchase of the patent and 2025 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Patents cash (To record purchase of patents) Amortization Expense Patents (To record amortization of patents) Debit 24,000 8400 Credit 24,000 24,000