Smith Company acquired patent rights on January 6, 2013, for $940,500 The patent has a useful life equal to its legal life of nine years On January 3, 2016, Smith successfully defended the patent in a lawsuit at a cost of $40,200 Required A Determine the patent amortization expense for the year ended December 31, 2016 B Journalize the adjusting entry to recognize the amortization Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 Adjusting Entries 2 3 Big Sky Mining Co acquired mineral rights for $38,150,000 The mineral deposit is estimated at 21,800,000 tons During the current year, 2,090,000 tons were mined and sold Required A Determine the amount of depletion expense for the current year B Journalize the adjusting entry to recognize the depletion expense Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 Adjusting Entries 2 3 Equipment acquired on January 6, 2013, at a cost of $360,550, has an estimated useful life of 12 years and an estimated residual value of $69,910 Required A What was the annual amount of depreciation for the years 2013, 2014, and 2015 using the straight line method of depreciation B What was the book value of the equipment on January 1, 2016 C Assuming that the equipment was sold on January 3, 2016, for $272,570, journalize the entry to record the sale Refer to the Chart of Accounts for exact wording of account titles D Assuming that the equipment had been sold on January 3, 2016, for $303,490 instead of $272,570, journalize the entry to record the sale Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 2 3 4 D Assuming that the equipment had been sold on January 3, 2016, for $303,490 instead of $272,570, journalize the entry to record the sale Refer to the Chart of Accounts for exact wording of account titles PAGE 1 JOURNAL DATE DESCRIPTION POST REF DEBIT CREDIT 1 2 3 4

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 27, 2024

Smith Company acquired patent rights on January 6, 2013, for $940,500. The patent has a useful life equal to its legal life of nine years.

Smith Company acquired patent rights on January 6, 2013, for $940,500. The patent has a useful life equal to its legal life of nine years. On January 3, 2016, Smith successfully defended the patent in a lawsuit at a cost of $40,200.

Required:

Determine the patent amortization expense for the year ended December 31, 2016.

Journalize the adjusting entry to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

Adjusting Entries

Big Sky Mining Co. acquired mineral rights for $38,150,000. The mineral deposit is estimated at 21,800,000 tons. During the current year, 2,090,000 tons were mined and sold.

Required:

Determine the amount of depletion expense for the current year.

Journalize the adjusting entry to recognize the depletion expense. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

Adjusting Entries

Equipment acquired on January 6, 2013, at a cost of $360,550, has an estimated useful life of 12 years and an estimated residual value of $69,910.

	Required:
A.	What was the annual amount of depreciation for the years 2013, 2014, and 2015 using the straight-line method of depreciation?
B.	What was the book value of the equipment on January 1, 2016?
C.	Assuming that the equipment was sold on January 3, 2016, for $272,570, journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.
D.	Assuming that the equipment had been sold on January 3, 2016, for $303,490 instead of $272,570, journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4

D. Assuming that the equipment had been sold on January 3, 2016, for $303,490 instead of $272,570, journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL