Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer this question two subparts Victor Mineli , the new controller of Carla Vista Co., has reviewed the expected useful lives and salvage values

Please answer this question two subparts
image text in transcribed
image text in transcribed
Victor Mineli , the new controller of Carla Vista Co., has reviewed the expected useful lives and salvage values of selected depreciable asset categories at the beginning of 2017. Here are his findings: Category Date Historical Accum. Useful Life (Years) Salvage Value of Asset Acquired Cost Deprec. Original Proposed Original. Proposed Building 1/1/2009 5736,500 $136,000 40 48 $56,500 $36,700 Warehouse 1/1/2012 145,000 27,710 25 20 6,450 4,400 All assets were placed into service on their acquisition dates and are depreciated by the straight-line method. Carla Vista Couses a calendar year in preparing annual financial statements. Note that "Proposed" useful life is a revised estimate of total life, not remaining life. Enter all answers in whole dollar amounts without a $. If rounding is necessary, round to the nearest whole dollar (eg, xxx) a. Using the original values, how much annual depreciation expense did Carla Vista recognize for the Building in 2016? b. Assume that management has agreed to accept Victor's proposed useful life change for the Building, but decides to retain the original salvage value estimate. How much annual depreciation expense will Carla Vista recognize for the Building in 20172 c. Now assume that management has agreed to accept Victor's proposed changes to both the useful life and the salvage value of the Building. How much annual depreciation expense will Carla Vista recognize for the Building in 2017? d. Using the original values, how much annual depreciation expense did Carla Vista recognize for the Warehouse in 2016? e. Assume that management has agreed to accept Victor's proposed useful life change for the Warehouse, but decides to retain the original salvage value estimate. How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017? f. Now assume that management has agreed to accept Victor's proposed changes to both the useful life and the salvage value of the Warehouse. How much annual depreciation expense will Carla Vista recognize for the Warehouse in 2017? Lake Company, organized in 2017, has the following transactions related to intangible assets. Lake Company uses the calendar year for financial reporting. 1/1/17 $560,000 4/1/17 360,000 Purchased patent (8-year life) Goodwill purchased (indefinite life) Purchased copyright on artwork expiration date 7/1/2037 Research and development costs 7/1/17 440,000 9/1/17 185,000 Enter your answers below in whole dollars without a $ sign (e.g, xxx) a. How much expense will Lake Company recognize in 2017 due to the purchased patent? b. How much expense will Lake Company recognize in 2017 due to the purchased Goodwill? C. How much expense will Lake Company recognize in 2017 due to the purchased copyright? d. How much expense will Lake Company recognize in 2017 due to the Research and development? e. Based on the above, what is the net book value of total intangible assets that Lake Company's balance sheet will show on Dec 31, 2017

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Charles T Horngren, Gary L Sundem, William O Stratton, Howard D Teall, George Gekas

5th Canadian Edition

0131922688, 978-0131922686

More Books

Students also viewed these Accounting questions

Question

How does that affect your approach to complaint handling?

Answered: 1 week ago