Suppose Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. The company expects to install this system in its automobiles for eight years. Durtan will sell this as an extra for $1,000. In the first year, 10,400 units were sold. All costs per unit totalled $850 Required 1. As the CFO, how would you record transactions relating to the patent in the first year? 2. Prepare the income statement for the integrated system's operations for the first year. Evaluate the profitability of the integrated system's operations. Use an income tax rate of 32% 3. Explain what items were recorded as assets and why Requirement 1. As the CFO, how would you record transactions relating to the patent in the first year? Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. Record the transaction. (Record debits first, then credits. Explanations are not required.) Journal Entry Date Accounts Credit 2,400,000 2,400,000 Debit Patent Cash In the first year. 10,400 units were sold. All costs per unit totalled $850. Record the cost of sales transaction. Journal Entry Date Accounts Debit Credit Cost of Sales 850 850 balance sheet reports the asset Cost in Excess of Net Assets of Purchased Businesses. Assume that Thomas acquired another company. o icon to view the figures.) term used in Canadian financial reporting for the asset Cost in Excess of Net Assets of Purchased Businesses? omas Inc.'s purchase of the other company for $5.4 million cash at Thomas determined that the asset Cost in Excess of Net Assets of Purchased Businesses increased in value by $850,000. How would od? Then, suppose Cost in Excess of Net Assets of Purchased Businesses decreased in value by $850,000. How would this transaction be e basis for your decision in each case. 1. What is the term used in Canadian financial reporting for the asset Cost in Excess of Net Assets of Purchased Businesses? d in Canadian financial reporting for Cost in Excess of Net Assets of Purchased Businesses is goodwill Carrying amount of net assets Fair value of assets $ 3.1 million 4.1 million omas Inc.'s purchase of the other company for $5.4 million cash. (Enter debit first, then credits. Explanation wounded to one decimal place.) Journal Entry Accounts Debit Credit 4.1 1.3 5.4 ermined that the asset Cost in Excess of Net Assets of Purchased Businesses inci se Cost in Excess of Net Assets of Purchased Businesses decreased in value by: sion in each case. ets of Purchased Businesses increases in value by $850,000, no journal entry is in the value of value increased over its original re Suppose Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. The company expects to install this system in its automobiles for eight years. Durtan will sell this as an extra for $1,000. In the first year, 10,400 units were sold. All costs per unit totalled $850 Required 1. As the CFO, how would you record transactions relating to the patent in the first year? 2. Prepare the income statement for the integrated system's operations for the first year. Evaluate the profitability of the integrated system's operations. Use an income tax rate of 32% 3. Explain what items were recorded as assets and why Requirement 1. As the CFO, how would you record transactions relating to the patent in the first year? Durtan paid $2.4 million for a patent related to an integrated system, including hands-free cell phone, GPS, and iPod connectivity. Record the transaction. (Record debits first, then credits. Explanations are not required.) Journal Entry Date Accounts Credit 2,400,000 2,400,000 Debit Patent Cash In the first year. 10,400 units were sold. All costs per unit totalled $850. Record the cost of sales transaction. Journal Entry Date Accounts Debit Credit Cost of Sales 850 850 balance sheet reports the asset Cost in Excess of Net Assets of Purchased Businesses. Assume that Thomas acquired another company. o icon to view the figures.) term used in Canadian financial reporting for the asset Cost in Excess of Net Assets of Purchased Businesses? omas Inc.'s purchase of the other company for $5.4 million cash at Thomas determined that the asset Cost in Excess of Net Assets of Purchased Businesses increased in value by $850,000. How would od? Then, suppose Cost in Excess of Net Assets of Purchased Businesses decreased in value by $850,000. How would this transaction be e basis for your decision in each case. 1. What is the term used in Canadian financial reporting for the asset Cost in Excess of Net Assets of Purchased Businesses? d in Canadian financial reporting for Cost in Excess of Net Assets of Purchased Businesses is goodwill Carrying amount of net assets Fair value of assets $ 3.1 million 4.1 million omas Inc.'s purchase of the other company for $5.4 million cash. (Enter debit first, then credits. Explanation wounded to one decimal place.) Journal Entry Accounts Debit Credit 4.1 1.3 5.4 ermined that the asset Cost in Excess of Net Assets of Purchased Businesses inci se Cost in Excess of Net Assets of Purchased Businesses decreased in value by: sion in each case. ets of Purchased Businesses increases in value by $850,000, no journal entry is in the value of value increased over its original re