In each of the following situations, compute the amounts of revenue, gain, expense, and loss to be shown on the income statement for the year, as well as the amount of asset to be shown on the balance sheet as of the end of the year. Show the journal entry or entries required, and provide reasons for your decisions. Straight-line amortization is used. The reporting period is the calendar year. The situations are independent of each other, except where noted.

a A textile manufacturer gives \(\$ 250 ; 000\) to the Textile Engineering. Department of a.local university for basic research in fibers. The results of the research, if any, will belong to the general public.

b A film producer incurred costs of \(\$ 12\) million during the year to produce a movie for television. A television network paid the film producer \(\$ 10\) million during the year for the rights to show the film once: The contract with the network specifies that the film will be shown during the summer of the next accounting period, and that the network will pay the producer another \(\$ 5\) million at the time of that showing.

c Same data as in part

b, but the network has the additional option to show the film still a third time 2 years from now for an additional fee of \(\$ 5\) million, payable only if the option is exercised.

d The same film producer mentioned above incurred costs of \(\$ 3\) million to produce an avant garde film. No network has yet purchased rights to show the film. In the past, the producer has generally not recovered all of the costs of such speculative films.

e On January 1, an automobile company incurs costs of \(\$ 6\) million for specialized machine tools necessary for producing a new model automobile. Such tools last for 6 years, on average, but the new model automobile is expected to be produced for only 3 years.

f A company wishes to acquire a.5-acre site for a new warehouse. The land it wants is part of a 10 -acre site that the owner insists be purchased as a whole for \(\$ 18,000\). The company purchases the land, spends \(\$ 2,000\) in legal fees for rights to divide the site into two 5 -acre plots, and immediately offers half of the land for resale. The two best offers are

(1) \(\$ 12,000\) for the east half, and

(2) \(\$ 13,000\) for the west half.

The company sells the east half.

g The same data as in part \(\mathrm{f}\), except the two best offers are

(1) \(\$ 5,000\) for the east half, and

(2) \(\$ 12,000\) for the west half.

The company sells the west half.