The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the current fiscal year. What amount should Pribuss expense in its current-year income statement related to the above expenditures?
Answers
Complete Question:
Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:
Research for New Design $2.4M
DVMPT of New Product $1.3M
Patent Filing Fees $52K
The development costs were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2018 fiscal year. What amount should Pribuss expense in its 2018 income statement related to the above expenditures?
Answer:
The Research expenses of $2.4M that are written as expense in the Income statement and the Development costs of $1.3M and patent legal fees of $53k are capitalized.
Explanation:
The reason is that the International Standard IAS 38 Intangible Assets says that the expenditure incurred on the research that hasn't entered development phase must be written as expense in the year and the expenditure incurred on the development phase of the research outcomes must be capitalized to the extent it is ready for use. In this case $1.3M is clearly a development cost and patent legal fees of $53k is the expenditure that will prepare the asset and making it ready for use, so it must also be capitalized.
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Answers
ACCT 163 - Office Equipment
Debit - 8,000
d. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
e. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
WHAT IS THE JOURNAL ENTRY FOR D & E????? I have the correct accounts, I just can't figure out the amounts....
d Depreciation expense—Computer equipment
Accumulated depreciation—Computer equipment
e Depreciation expense—Office equipment
Accumulated depreciation—Office equipment
Answers
d. The depreciation expense-computer equipment will be debited, and accumulated depreciation will be credited with $5,600.
e. The depreciation expenses-office equipment will be debited, and accumulated depreciation will be credited with $1,600.
Further Explanation:
Depreciation:
Depreciation refers to the allocation of the cost of the physical asset over the useful life of the asset. The depreciation is a non-cash expense of the business. The value of the asset decreases as the business uses the asset for the operating activities. The normal wear and tear in the value of the asset are recorded as the depreciation. The depreciation can be calculated as follows:
Journal entry for the depreciation of computer system and office equipment:
The depreciation expense-computer equipment will be debited, and accumulated depreciation will be credited with $5,600.
The depreciation expenses-office equipment will be debited, and accumulated depreciation will be credited with $1,600.
Working notes:
Calculate the annual deprecation for computer depreciation:
Calculate the annual depreciation on office equipment:
Learn More:
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Answer Details:
Grade: Middle school
Chapter: Depreciation
Subject: Accounting
Keywords: computer, system, acquired, October, expected, have, four-year, life, salvage, value, office, equipment, acquired, October 1, five-year life, no, salvage value.
Final answer:
The journal entries to record depreciation expense for computer equipment and office equipment acquired on October 1 are $1,400 for computer equipment and $400 for office equipment, corresponding to three months of depreciation in the first year.
Explanation:
The journal entry to record depreciation for both computer equipment and office equipment on October 1 should include the depreciation expense for the first year of use and the corresponding accumulated depreciation for each asset. To calculate the depreciation expense for the computer system with a cost of $22,400 and a 4-year life, divide the initial cost by the number of years to find the annual depreciation, which is $5,600 (22,400 ÷ 4). Since the equipment was acquired on October 1, only 3 months of depreciation should be recorded for the current year. Therefore, the depreciation expense for the three months is $5,600 ÷ 12 months x 3 months = $1,400.
The office equipment with a cost of $8,000 and a 5-year life, would have an annual depreciation of $1,600 (8,000 ÷ 5). Similarly, only 3 months' worth is considered for the first year, giving a depreciation expense of $1,600 ÷ 12 months x 3 months = $400.
The journal entries would look like this:
- Depreciation expense—Computer equipment $1,400
- Accumulated depreciation—Computer equipment $1,400
- Depreciation expense—Office equipment $400
- Accumulated depreciation—Office equipment $400
Learn more about Depreciation Journal Entry here:
#SPJ3
Answers
Answer:
Fourth National Bank made an assignment.
Explanation:
A standard form deed of assignment under which a lender (the assignor) assigns its rights relating to a facility agreement (also known as a loan agreement) to a new lender (the assignee). Only the assignor's rights under the facility agreement (such as to receive repayment of the loan and to receive interest) are assigned. The assignor will still have to perform any obligations it has under the facility agreement.
Answers
A.Federal Reserve system.
B. banking system.
C.monetary system.
D.financial system.
2.When a large, well-known corporation wishes to borrow directly from the public, it can
A.sell bonds.
B.sell shares of stock.
C.go to a bank for a loan.
D.All of the above are correct.
3.Which of the following statements about the term of a bond is correct?
A.Term refers to the various characteristics of a bond, including its interest rate and tax treatment.
B.The term of a bond is determined entirely by its credit risk.
C.The term of a bond is determined entirely by how much sales charge the buyer of the bond pays when he or she purchases the bond.
D.Interest rates on long-term bonds are usually higher than interest rates on short-term bonds.
4.The economy’s two most important financial markets are
A.the investment market and the saving market.
B.the bond market and the stock market.
C.banks and the stock market.
D,financial markets and financial institutions.
5.Two of the economy’s most important financial intermediaries are
A.suppliers of funds and demanders of funds.
B.banks and the bond market.
C.the stock market and the bond market.
D. banks and mutual funds.
6. We associate the term debt finance with
A.the bond market, and we associate the term equity finance with the stock market.
B.the stock market, and we associate the term equity finance with the bond market.
C.financial intermediaries, and we associate the term equity finance with financial markets.
D.financial markets, and we associate the term equity finance with financial intermediaries.
7. Northwest Wholesale Foods sells common stock. The company is using
A.equity financing and the return shareholders earn is fixed.
B.equity financing and the return shareholders earn depends on how profitable the company is.
C.debt financing and the return shareholders earn is fixed.
D.debt financing and the return shareholders earn depends on how profitable the company is.
8. If the tax revenue of the federal government exceeds spending, then the government necessarily
A.runs a budget deficit.
B.runs a budget surplus.
C.runs a national debt.
D.will increase taxes.
9. The source of the supply of loanable funds
A. is saving and the source of demand for loanable funds is investment.
B. is investment and the source of demand for loanable funds is saving.
C. and the demand for loanable funds is saving.
D. and the demand for loanable funds is investment.
10.What would happen in the market for loanable funds if the government were to increase the tax on interest income?
Answers
(1) A.Federal Reserve system.
(2) C.go to a bank for a loan.
(3) A.Term refers to the various characteristics of a bond, including its interest rate and tax treatment.
(4) A.the investment market and the saving market.
(5) C.the stock market and the bond market.
(6) C.financial intermediaries, and we associate the term equity finance with financial markets.
(7) A.equity financing and the return shareholders earn is fixed.
(8) D.will increase taxes.
(9) A. is saving and the source of demand for loanable funds is investment.
Answers
This is not enough information to answer this question.