Robotix Co. purchases a patent for $23,000 on January 1. The
patent is good for 18 years, after which anyone can use the patent
technology. However, Robotix plans to sell products using that
patent technology for only 5 years. Prepare the intangible asset
section of the balance sheet that reports on this patent at the end
of the first year.
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| ROBOTIX CO. |
| Balance Sheet |
| December 31 |
| Assets |
| Intangible assets |
| |
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Kegler Bowling buys scorekeeping equipment with an invoice cost
of $195,000. The electrical work required for the installation
costs $20,475. Additional costs are $4,095 for delivery and $14,050
for sales tax. During the installation, the equipment was damaged
and the cost of repair was $1,890.
Indicate whether each cost should be recorded as the cost of the
equipment or expensed as incurred.
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| Costs |
Amount |
Included/ Excluded |
Account |
| Invoice cost |
$195,000 |
|
|
| Electrical work required for
installation |
20,475 |
|
|
| Delivery costs |
4,095 |
|
|
| Sales tax |
14,050 |
|
|
| Repair costs |
1,890 |
|
|
| Total recorded cost |
|
|
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On January 1, the Matthews Band pays $66,000 for sound equipment.
The band estimates it will use this equipment for four years and
perform 200 concerts. It estimates that after four years it can
sell the equipment for $1,000. During the first year, the band
performs 45 concerts.
Compute the first-year depreciation using the straight-line
method.
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| Straight-Line Depreciation |
| Choose Numerator: |
/ |
Choose Denominator: |
= |
Annual Depreciation Expense |
|
/ |
|
= |
Depreciation expense |
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/ |
|
= |
|
|
On January 1, the Matthews Band pays $66,000 for sound
equipment. The band estimates it will use this equipment for four
years and perform 200 concerts. It estimates that after four years
it can sell the equipment for $1,000. During the first year, the
band performs 45 concerts.
Compute the first-year depreciation using the straight-line
method.
| Straight-Line Depreciation |
| Choose Numerator: |
/ |
Choose Denominator: |
= |
Annual Depreciation Expense |
|
/ |
|
= |
Depreciation expense |
|
/ |
|
= |