Requirement c. Indicate the effects of these transactions on the current year-end income statement, balance sheet (excluding the effect on the cash balance), and cash flow statement using the direct and indirect methods. First indicate the effects of these transactions on the balance sheet (ignore cash effects) and income statement. (For Requirement b, consider only the transactions that required a journal entry. If a box is not used in the table, leave the box empty; do not select a label. Abbreviations Used: LT = Long-term.) Transaction Income Statement Balance Sheet 1 12 13 4 5 Req. b Accumulated Amortiza No effect Requirement c. Indicate th Decrease in LT liabilities First indicate the effects of = Long-term.) Decrease in LT operating assets Transaction Decrease in operating expenses 1 Decrease in retained earnings 2 Decrease in revenue Increase in LT liabilities 3 Increase in LT operating assets 4 Increase in operating expenses 5 Increase in retained earnings Increase in revenue Req. b ..... More Info 1. Paid $690,000 to fund internal research designed to develop a new digital scanner. The company expects the useful life to be 3 years. 2. Patented a product based on internal research that could be sold to consumers. Before applying for the patent, incurred additional costs of $243,000 to complete product development ensuring the product was technologically feasible. Paid $15,000 for patent filing costs and legal fees to successfully defend the patent. The company expects the new technology will be profitable for a 3-year period. 3. Leased three floors of office space. The lease was secured by making an advance payment of $260,000. The lease is a 10-year lease with no renewal options. 4. Paid $610,000 to renovate the leased property to prepare the leased floors for intended use. The useful life of the renovations is estimated at 10 years. 5. Paid $61,200 to acquire a franchise to distribute ICC external hard drives for a 9-year narind a. Prepare the journal entries to record each of the transactions. b. Assume that Hajjar acquired Draper Development last year. Hajjar recorded the following intangible assets on the date of acquisition: Goodwill, $1,600,000 Draper Development Trademark, $630,000 Renewable licenses, $47,000 Prepare the year-end adjusting entries required for each of Hajjar's intangible assets. Assume that the straight-line method is used and a full year's amortization is taken in the year of acquisition. c. Indicate the effects of these transactions on the current year-end income statement, balance sheet (excluding the effect on the cash balance), and cash flow statement using the direct and indirect methods. Requirement c. Indicate the effects of these transactions on the current year-end income statement, balance sheet (excluding the effect on the cash balance), and cash flow statement using the direct and indirect methods. First indicate the effects of these transactions on the balance sheet (ignore cash effects) and income statement. (For Requirement b, consider only the transactions that required a journal entry. If a box is not used in the table, leave the box empty; do not select a label. Abbreviations Used: LT = Long-term.) Transaction Income Statement Balance Sheet 1 12 13 4 5 Req. b Accumulated Amortiza No effect Requirement c. Indicate th Decrease in LT liabilities First indicate the effects of = Long-term.) Decrease in LT operating assets Transaction Decrease in operating expenses 1 Decrease in retained earnings 2 Decrease in revenue Increase in LT liabilities 3 Increase in LT operating assets 4 Increase in operating expenses 5 Increase in retained earnings Increase in revenue Req. b ..... More Info 1. Paid $690,000 to fund internal research designed to develop a new digital scanner. The company expects the useful life to be 3 years. 2. Patented a product based on internal research that could be sold to consumers. Before applying for the patent, incurred additional costs of $243,000 to complete product development ensuring the product was technologically feasible. Paid $15,000 for patent filing costs and legal fees to successfully defend the patent. The company expects the new technology will be profitable for a 3-year period. 3. Leased three floors of office space. The lease was secured by making an advance payment of $260,000. The lease is a 10-year lease with no renewal options. 4. Paid $610,000 to renovate the leased property to prepare the leased floors for intended use. The useful life of the renovations is estimated at 10 years. 5. Paid $61,200 to acquire a franchise to distribute ICC external hard drives for a 9-year narind a. Prepare the journal entries to record each of the transactions. b. Assume that Hajjar acquired Draper Development last year. Hajjar recorded the following intangible assets on the date of acquisition: Goodwill, $1,600,000 Draper Development Trademark, $630,000 Renewable licenses, $47,000 Prepare the year-end adjusting entries required for each of Hajjar's intangible assets. Assume that the straight-line method is used and a full year's amortization is taken in the year of acquisition. c. Indicate the effects of these transactions on the current year-end income statement, balance sheet (excluding the effect on the cash balance), and cash flow statement using the direct and indirect methods
