Martinez,Inc

question 34

Essay

Martinez,Inc.acquired a patent on January 1,2016 for $40,000 cash.The patent was estimated to have a useful life of 10 years with no residual value.On December 31,2017,before any adjustments were recorded for the year,management determined that the remaining useful life was 6 years (with that new estimate being effective as of January 1,2017).On June 30,2018,the patent was sold for $25,000.
Required:
Part a.Prepare the journal entry to record the acquisition of the patent on January 1,2016.
Part b.Prepare the journal entry to record the annual amortization for 2016.
Part c.Compute the amount of amortization that would be recorded in 2017.
Part d.Determine the gain (loss)on sale on June 30,2018.
Part e.Prepare the journal entry to record the sale of the patent on June 30,2018.

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Definitions:

User-Generated Content

Content created and shared by users or consumers, rather than content creators or brands, often facilitated by digital platforms or social media.

Graphical User Interfaces

A visual way of interacting with a computer using items like windows, icons, and menus, allowing users to interact more intuitively with digital devices.

HTML

HyperText Markup Language, the standard markup language for documents designed to be displayed in a web browser, structuring content and multimedia on the internet.

Advertising-Based

A business model or strategy that relies primarily on advertising revenue to sustain its operations and profit margins.