Question
Consider each of the transactions below. All of the expenditures were made in cash. On Feb 1, 2020, the Bean company completed the acquisition of
Consider each of the transactions below. All of the expenditures were made in cash.
On Feb 1, 2020, the Bean company completed the acquisition of the Coffee Corporation for $3,410,000 in cash. The fair value of the net identifiable assets of Coffee was $2,950,000. Bean purchased a patent on April 30, 2020 that was valued at $101,400. The remaining legal life of the patent was 17 years, but Bean believes that the patent will only be useful for another nine years. Bean received approval for a trademark on July 1, 2020, by paying a legal fee of $120,000. The contractual life of the trademark is 10 years. Bean spent $57,000 from Sept 1 through Sept 30 for experimental purposes in connection with the development of a new product. On Oct 1, Bean installed a new part, at a cost of $88,000, on it's most used coffee machine that would make the machine more efficient to produce more bags of coffee. The machine has a useful life of 8 years remaining with no salvage value, and a current book value of 208,000. Bean uses straight-line depreciation on it's machines. On Dec 31, 2020 Bean Co. traded one of its old machines with an original cost of $13,400 and a book value of $4,800, plus cash of $12,500 for a new machine that had a fair value of $20,200. The exchange has commercial substance.
Prepare the entries made throughout the year
Date Account Description Debit Credit
Prepare 12/31/20 year-end-adjusting entries
Date Account Description Debit Credit
** in excel please!
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