cSeure Ihntps/mpbunihescourne.comvplatorm/mod q ttenph attept-170657spage 5 Wind

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cSeure Ihntps/mpbunihescourne.comvplatorm/mod q ttenph attept-170657spage 5 Windows Media Windows Raising cash still tou 100 Must lead Bok DAFC- D cue expense and prepare a journal entry to record the expense: or each of the following unrelated situations, calculate the a A patent with a 15 year remaining legal life was purchased for $670,600. The patent will be commercually exploitable for another seven years b. A patent was acquired on a device designed by a production worker. Although t fees for handling the patent application, the patent should be commercially valuable during its entire remaining legal life of 18 years and is currerntly worth $900,000. c A franchise granting exclusive distribution rights for a new wind turbine within a three-state area for four years was obtained at a cost of $83,200. Satisfactory sales performance over the four years permits renewal of the franchise for another four years (at an additional cost determined at renewal General Journal Description Debit Credit To record patent amortization To record franchise 8 4 5 6

Explanation / Answer

No. Account Debit credit 1 Amortisation expense 95800 Patent 95800 [being patent amortised over its commercial life 670600/7] 2 Amortisation expense 7880 patent 7880 [amortisation of patent cost over its useful life 141840/18] 3 Amortisation expense 20800 franchise 20800 Being franchise amortised [83200/4]

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