ACC 304 All Assignments ACC 304 All Assignments | Page 195

7) Alatorre purchased the license for distribution of a popular
consumer product on January 1, 2014, for $150,000. It is expected that
this product will generate cash flows for an indefinite period of time.
The license has an initial term of 5 years but by paying a nominal fee,
alatorre can renew the license indefinitely for successive 5-year terms.
What amount should be amortized for the year ended December 31,
2014?
8) Tones Industries has the following patents on its December 31,
2013, balance sheet. The following events occurred during the year
ended December 31, 2014. The proper discount rate to be used for
these flow is 8%. ( assume that the cash flow occur at the end of the
year.) Compute the total carrying amount of tones’ patents on its
December 31, 2013, balance sheet.
9)
Compute the total carrying amount of tones’ patents on its
December 31, 2014, balance sheet.
10) Presented below is information related to copyrights owned by
Walter de la Mare Company at December 31, 2014. Assume that Walter
de la Mare Company will continue to use this copyright in the future. As
of December 31, 2014, the copyright is estimated to have a remaining
useul life of 10 years.
11) Prepare the journal entry ( if any ) to record the impairment of the
asset at December 31, 2014. The company does not use accumulated
amortization accounts.
12) Prepare the journal entry to record amortization expense for 2015
related to the copyrights.