assuming the machinery was purchased on October 1, 2012. Question 20
Jurassic Company owns machinery that cost $1,145,700 and has
accumulated depreciation of $458,280. The expected future net cash
flows from the use of the asset are expected to be $636,500. The fair
value of the equipment is $509,200. Prepare the journal entry, if any, to
record the impairment loss. Question 21 Everly Corporation acquires a
coal mine at a cost of $501,600. Intangible development costs total
$125,400. After extraction has occurred, Everly must restore the
property (estimated fair value of the obligation is $100,320), after which
it can be sold for $200,640. Everly estimates that 5,016 tons of coal can
be extracted. If 878 tons are extracted the first year, prepare the journal
entry to record depletion. Question 22 Francis Corporation purchased an
asset at a cost of $58,200 on March 1, 2012. The asset has a useful life
of 8 years and a salvage value of $5,820. For tax purposes, the MACRS
class life is 5 years. Compute tax depreciation for each year 2012–2017.
Question 23 Celine Dion Corporation purchases a patent from Salmon
Company on January 1, 2012, for $50,820. The patent has a remaining
legal life of 16 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 2012 amortization. Question 24 Karen Austin Corporation
has capitalized software costs of $768,500, and sales of this product the
first year totaled $390,630. Karen Austin anticipates earning $911,470 in
additional future revenues from this product, which is estimated to have
an economic life of 4 years. Compute the amount of software cost
amortization for the first year. (a) Compute the amount of software cost
amortization for the first year using the percent of revenue approach. (b)
Compute the amount of software cost amortization for the first year
using the straight-line approach. Question 25 Jeff Beck is a farmer who
owns land which borders on the right-of-way of the Northern Railroad.
On August 10, 2012, due to the admitted negligence of the Railroad, hay
on the farm was set on fire and burned. Beck had had a dispute with the
Railroad for several years concerning the ownership of a small parcel of
land. The representative of the Railroad has offered to assign any right s
which the Railroad may have in the land to Beck in exchange for a
release of his right to reimbursement for the loss he has sustained from