ACC211 Brief Exercise 12
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Brief Exercise 12-1
Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2014, for $78,790. The patent has a remaining legal life of 17 years. Celine Dion feels the patent will be useful for 10 years.
Prepare Celine Dion’s journal entries to record the purchase of the patent and 2014 amortization.
Account Titles and Explanation Debit Credit
Patents 78,790
Cash 78,790
(To record purchase of patents)
Amortization Expense 7,879
Patents 7,879
Brief Exercise 12-2
Celine Dion Corporation purchases a patent from Salmon Company on January 1, 2014, for $50,300. The patent has a remaining legal life of 16 years. Celine Dion feels the patent will be useful for 10 years. Assume that at January 1, 2016, the carrying amount of the patent on Celine Dion’s books is $40,240. In January, Celine Dion spends $31,200 successfully defending a patent suit. Celine Dion still feels the patent will be useful until the end of 2023.
Prepare the journal entries to record the $31,200 expenditure and 2016 amortization
Account Titles and Explanation Debit Credit
Patents 31,200
Cash 31,200
(To record expenditure of patents)
Amortization Expense 8,930
Patents 8,930
(To record amortization expense)
*Brief Exercise 12-3
Your answer is correct.
Larry Byrd, Inc., spent $89,900 in attorney fees while developing the trade name of its new product, the Mean Bean Machine.
Prepare the journal entries to record the $89,900 expenditure and the first year’s amortization, using an 10-year life
Account Titles and Explanation Debit Credit
Trade Names 89,900
Cash 89,900
(To record expenditure of trade names)
Amortization Expense 8,990
Trade Names 8,990
(To record amortization expense)
Brief Exercise 12-4...