The following transactions involving intangible assets of Simmons Corporation occurred on or near December 31, 2020....
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The following transactions involving intangible assets of Simmons Corporation occurred on or near December 31, 2020. Simmons paid Galaxy Company $600,000 for the exclusive right to market a particular product, using the Galaxy name and logo in promotional material. The franchise runs for as long as Simmons is in business. 1 2 3 4 5 6 7 8 Simmons spent $450,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. In January, 2021, Simmons' application for a patent (#2 above) was granted. Legal and registration costs incurred were $180,000. The patent runs for 20 years, but Simmons estimates that the manufacturing process will only be useful to Simmons for nine years. Simmons incurred $120,000 in an unsuccessful patent defense. As a result of the adverse verdict, the patent is virtually worthless to Simmons. The carrying value of this patent before the litigation was $480,000. Simmons incurred $100,000 of legal costs in successfully defending one of its patents in an infringement suit. The carrying value of this patent before the litigation was $320,000. The patent expires in December, 2026. Simmons paid Advanced Laboratories $104,000 for research and development work performed under contract for Simmons. The benefits are expected to last six years. Simmons purchased James Company four years ago and at that time recorded goodwill of $640,000. The James Division's net identifiable assets, including goodwill, have a carrying amount of $1,425,000 at 12/31/21. The fair value of the Division's expected future net cash flows (undiscounted) is $1,500,000, and its fair value is estimated to be $1,350,000. Simmons acquired a copyright from Banner Company for $2,000,000 with five years left on its legal life. At 12/31/21, its expected future net cash flows (undiscounted) are $1,500,000, and its fair value is $ 1,200,000. Write the journal entry(ies) needed at that date of the transactions listed above and any journal entries needed at December 31, 2021. If no entry is required at a particular date, write "no JE needed." The following transactions involving intangible assets of Simmons Corporation occurred on or near December 31, 2020. Simmons paid Galaxy Company $600,000 for the exclusive right to market a particular product, using the Galaxy name and logo in promotional material. The franchise runs for as long as Simmons is in business. 1 2 3 4 5 6 7 8 Simmons spent $450,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. In January, 2021, Simmons' application for a patent (#2 above) was granted. Legal and registration costs incurred were $180,000. The patent runs for 20 years, but Simmons estimates that the manufacturing process will only be useful to Simmons for nine years. Simmons incurred $120,000 in an unsuccessful patent defense. As a result of the adverse verdict, the patent is virtually worthless to Simmons. The carrying value of this patent before the litigation was $480,000. Simmons incurred $100,000 of legal costs in successfully defending one of its patents in an infringement suit. The carrying value of this patent before the litigation was $320,000. The patent expires in December, 2026. Simmons paid Advanced Laboratories $104,000 for research and development work performed under contract for Simmons. The benefits are expected to last six years. Simmons purchased James Company four years ago and at that time recorded goodwill of $640,000. The James Division's net identifiable assets, including goodwill, have a carrying amount of $1,425,000 at 12/31/21. The fair value of the Division's expected future net cash flows (undiscounted) is $1,500,000, and its fair value is estimated to be $1,350,000. Simmons acquired a copyright from Banner Company for $2,000,000 with five years left on its legal life. At 12/31/21, its expected future net cash flows (undiscounted) are $1,500,000, and its fair value is $ 1,200,000. Write the journal entry(ies) needed at that date of the transactions listed above and any journal entries needed at December 31, 2021. If no entry is required at a particular date, write "no JE needed."
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1 Dr Franchise 600000 Cr Cash 600000 2 Dr Manufacturing 450000 Cr ... View the full answer
Related Book For
Accounting Principles Volume 2
ISBN: 9781119786634
9th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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