Question
1.Dada Corp. was organized in 2013. Its accounting records include only one account for all intangible assets. The following is a summary of the entries
1.Dada Corp. was organized in 2013. Its accounting records include only one account for all intangible assets. The following is a summary of the entries that have been recorded and posted during the years 2013 and 2014:
7/1/13Franchise expiring on June 30, 2021P252,000
10/1/13Advance payment on lease expiring on October 31, 2015168,000
13/31/13Net loss for 2013 including incorporation fee, P6,000, and
Related legal fees of organizing the business, P30,000 (all
Incurred in 2013)96,000
1/2/14Acquired patent with a useful life of 10 years444,000
3/14/14Cost of developing a secret formula450,000
4/1/14Goodwill purchased1,670,400
7/1/14Legal fees for successful defense of patent purchase on 1/2 75,900
10/1Research and development costs on a new project960,000
REQUIRED:
a.The unamortized patent cost at December 31, 2014
b.The unamortized franchise cost at December 31, 2014
c.The amount of prepayments to be reported as of December 31, 2014
d.The adjusting entries in December 31, 2014, should include a net debit to the retained earnings account at?
e.As a result of the adjustments at December 31, 2014, the total charges against income of 2014 should be:
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