In January 2023, Jerry Corp. purchased a patent for a new product for $800,000.  At the time of purchase, the patent was legally valid for another 12-years.  Due to the competitive nature of the industry, however, Jerry estimated the patent’s economic life to be 5-years from the date of purchase.  How much patent amortization should Jerry record on their financial statements for 2023?

Bradley, Corp. owns machinery with a book value of $445,000.  It is estimated that the machinery will generate future cash flows of $335,000.  The machinery has a fair value of $395,000.  Bradley should recognize a loss on impairment of:

In January 2023, Bradley, Corp. purchased a patent for a new product for $850,000.  At the time of purchase, the patent was legally valid for another 13-years.  Due to the competitive nature of the industry, however, Bradley estimated the patent’s economic life to be 11-years from the date of purchase.  How much patent amortization should Bradley record on their financial statements for 2023?

Sky Company’s 12/31/23 balance sheet reports assets of $6,580,000 and liabilities of $2,800,000. All of Sky’s assets’ book values approximate their fair value, except for land, which has a fair value that is $420,000 greater than its book value. On 12/31/23, Horace Wimp Corporation paid $7,140,000 to acquire Sky. What amount of goodwill should Horace Wimp record as a result of this purchase?

Alexander Enterprises leases property to Hamilton, Inc.  Because Hamilton is experiencing financial difficulty, Alexander agrees to receive rent of $20,000 at the end of each year for 4 years.  What is the present value of the 4 rents discounted at 8%?  You can use the tables below, a spreadsheet, or your calculator.  Round your answer to the nearest whole dollar. 4-periods PV(1) PV(OA) PV (AD) FV(1) 8%                          0.735030                          3.312127                          3.577097                          1.360489

McKinley Industries purchased a piece of equipment for their manufacturing facilities and paid with a 3-year, zero-interest bearing $125,000 notes payable.  Assuming a 5-year useful life and no salvage value, how much straight-line depreciation expense would McKinley record for this asset each year?  McKinley typically borrows at a rate of 5%. The present value of one for 3-periods at 5% is: .86384 The present value of one for 5-periods at 5% is: .78353 Round all calculations to whole dollars.

Grover Company has outstanding 10,000 shares of $10 par value common stock, which had been issued at $42/share. During 2023, Grover purchased 1,000 treasury shares for $45/share and on June 1, 2024, Grover resold 100 of the treasury shares at $42/share.  There were no other transactions involving this Treasury Stock.  What is the impact of the June 1, 2024 transaction on the following financial statement categories: I = Increase D = Decrease NE = No Effect   Assets Liabilities Stockholders’ Equity Paid-in-Capital Retained Earnings Net Income I I NE I NE D NE II I NE I NE NE I III NE NE NE NE D NE IV NE I NE NE D I

Which of the following statements regarding Treasury Stock is TRUE?

Which of the following statements are true? I: Changes in accounting principles and changes in accounting estimates are accounted for the same way II: Changes in accounting principles are accounted for using a retrospective approach  III: Changes in accounting principles and the correction of an error could lead to an adjustment of beginning retained earnings. IV: Adopting a new accounting standard, like the new Revenue Recognition Principle, should be accounted for as a change in accounting principle.

At December 31, 2023, the following information was available from Kohl Co.’s accounting records:                                                                                                  Cost                    Retail     Inventory, 1/1/23                                                            $147,000              $   203,000 Purchases                                                                           803,000                1,155,000 Freight-in                                                                            30,000                            0        Additional markups                                                                                              42,000 Gross sales for the year totaled $1,350,000 and there were $100,000 of sales returns during 2023. Markdowns amounted to $10,000. Under the conventional retail method, the cost of Kohl’s inventory at December 31, 2023 was: