34-1

01-01-2021
Patent 255,000
Cash 255,000
12-31-2021
Amortization – patent 12,750
Patent (255,000 / 20) 12,750
12-31-2022
Amortization – patent 12,750
Patent (255,000 / 20) 12,750
01-01-2023
Legal expense 90,000
Cash 90,000
12-31-2023
Amortization – patent 12,750
Patent (255,000 / 20) 12,750
01-01-2024
Patent 510,000
Cash 510,000
12-31-2024
Amortization – patent 42,750
Patent (255,000 / 20) 42,750

On original cost 12,750

On competing patent (510,000 / 17 yrs) 30,000
Total amortization – 2024 42,750

34-2
2021 R and D Expense 510,000
Cash 510,000
2024 Patent 720,000
Cash 720,000

Amortization – patent 45,000

Patent (720,000 / 16) 45,000
2025 Patent 540,000
Cash 540,000

Amortization – patent 81,000

Patent 81,000
On original patent – 45,000; on competing patent (540,000 / 15 years) – 36,000 = 81,000
34-3
2021 R and D expense 250,000
Cash 250,000
2022 Patent 60,000
Cash 60,000

Amortization – patent 6,000

Patent (60,000 / 10) 6,000
2023 Patent 600,000
Cash 600,000

Amortization – patent 43,600

Patent 43,600

Patent, 01/01/2023 (60,000 – 6,000 + 600,000) 654,000

Divided by useful life 15
Amortization 43,600

2024 Amortization – patent 43,600

Patent 43,600

Patent written off 566,800

Patent (654,000 – 43,600 – 43,600) 566,800

34-4
1. Patent 7,140,000
Cash 7,140,000
2. Amortization – patent 476,000
Patent (7,140,000 / 15) 476,000
3. Amortization – patent 816,000
Patent ((7,140,000 x 12/15) / 7) 816,000
4.
Acquisition cost 7,140,000
Amortization for the period 2021 – 2023 (476,000 x 3) (1,428,000)
Carrying amount, 01/01/2024 5,712,000
Amortization for the year 2024 (816,000)
Carrying amount, 12/31/2024 4,896,000

34-5
1. Patent 900,000
Cash 900,000
2. Amortization – patent 90,000
Patent (900,000 / 10) 90,000
3. Patent written off 540,000
Patent 540,000

Cost 900,000
Amortization (2021 to 2024) – 90,000 x 4 (360,000)
Carrying amount, 12/31/2024 540,000

34-6
1. Patent 6,200,000
Cash 6,200,000
2. Legal expenses 450,000
Cash 450,000
3. Amortization – patent 1,050,000
Patent 1,050,000

X (1,200,000 / 8) 150,000
Y (2,000,000 / 5) 400,000
Z (3,000,000 / 6) 500,000
Total 1,050,000

34-7
1. Retained Earnings 500,000
Patent 500,000
2. Patent 510,000
Retained Earnings 510,000
3. no adjustment
4. Loss on damages 100,000
Legal expense 30,000
Accrued liabilities 130,000
5. Patent 24,500
Retained Earnings 24,500

Amortization per book (500,000 – 450,000) 50,000

Correct amortization for 2020 (510,000 / 20) 25,500
Overamortization 24,500

6. Amortization – patent 25,500

Patent 25,500
34-8
1. Amortization – patent 280,000
Accumulated amortization (1,920,000 – 240,000) / 6 280,000
2. Trademark (800,000 x ¾) 600,000
Noncompetition agreement 200,000
Cash 800,000
3. Amortization – noncompetitive agreement 40,000
Accum. Amort. (200,000 / 5) 40,000
4. Royalty expense 50,000
Cash 50,000
34-9
2021 Copyright 285,000
Cash 285,000
Amortization – copyright 150,000
Copyright 150,000

285,000 / 95,000 = P3 per copy

50,000 x 3 = P150,000

2022 Amortization – copyright 90,000

Copyright (30,000 x 3) 90,000

34-10
1. Copyright 240,000
Retained Earnings 240,000

Cost of copyright 300,000

Less: Amortization (300,000 / 5) 60,000
Carrying amount 240,000

2. Amortization – copyright 60,000

Copyright 60,000

34-11
1. Copyright 620,000
Patent 400,000
Retained Earnings 1,020,000
Copyright 1 400,000
Less: Amortization from 2017 to 2020 (400,000 / 20 x 4 (80,000)
Carrying amount 320,000
Copyright 2 360,000
Less: Amort. 7/1/18 to12/31/20 (360,000 / 15 x 2.5 (60,000)
 Carrying amount 300,000
Patent 500,000
Less: Amort. for 2019 and 2020 (500,000 / 10 x 2) 100,000
Carrying amount 400,000
2. Amortization – copyright (20,000 + 24,000) 44,000
Amortization – patent 50,000
Copyright 44,000
Patent 50,000

34-12
Books of franchisee
1. Franchise 6,000,000
Cash 6,000,000
2. Amortization – franchise 300,000
Franchise (6,000,000 / 20) 300,000
3. Cash 25,000,000
Sales 25,000,000
4. Franchise fee expense 1,250,000
Cash (25,000,000 x 5%) 1,250,000

34-13
Boks of franchisee
1. Franchise 20,000,000
Cash 5,000,000
Note payable 15,000,000
2. Note payable (15,000,000 / 4) 3,750,000
Interest expense (15,000,000 x 10%) 1,500,000
Cash 5,250,000
3. No amortization for franchise with indefinite period

34-14
Boks of franchisee
1. Franchise (3,000,000 + 3,790,000) 6,790,000
Discount on note payable 1,210,000
Cash 3,000,000
Note payable 5,000,000
Note payable 5,000,000
Less: PV of note (1,000,000 x 3.79) 3,790,000
Implied interest 1,210,000
2. Amortization – franchise 679,000
 Franchise (6,790,000 / 10) 679,000
3. Note payable 1,000,000
Cash 1,000,000
4. Interest expense (10% x 3,790,000) 379,000
Discount on note payable 379,000

34-15 C
Cost 01/01/2016 6,000,000
Less: Amortization for 5 yrs (6M / 15 x 5) 2,000,000
Carrying amount, 2021 4,000,000
Divided by revised useful life 5
Amortization – 2021 800,000

34-16 A
4,500,000 / 10 = 450,000

34-17 D
Acquisition cost, 01/01/18 450,000
Less: Amortization for 2018-2020 (450,000 / 15 x 3) 90,000
Carrying amount, 01/01/21 360,000

Sales price 750,000

Less: carrying amount 360,000
Gain on sale 390,000

34-18 C
Cost 01/01/19 5,400,000
Amortization 2019 and 2020 (5,400,000 / 6 x 2) 1,800,000
Carrying amount, 01/01/21 3,600,000
Amortization for 2021 (3,600,000 / 20) 180,000

34-19 A
Design cost 1,500,000
Legal fees of registering trademark 150,000
Registration fee with patent office 50,000
Total cost of trademark 1,700,000

34-20 B
(1,000,000 +50,000 +105,000)
34-21 C
Down payment 2,000,000
PV of annual payment for 4 years (1,000,000 x 2.91) 2,910,000
Total 4,910,000

34-22 B
Original lease 12 years
Extension 8
Total life 20
Less: years expired (2019 and 2020) 2
Remaining life 18
Life of improvement (shorter) 15 years

Leasehold improvement 540,000

Less: Depreciation for 2021 (540,000 / 15) 36,000
Carrying amount 504,000

34-23 B
Accumulated depreciation – 12/31/2021 1,200,000 / 8 = 150,000

34-24 D
Travel costs of salaried employees 400,000
Training of local employees 1,200,000
Total 1,600,000

34-25 DDACD
34-26 AACCD
34-27 CDBDD