Johnson Company Receives Royalties on a Patent It Developed Several

question 89

Essay

Johnson Company receives royalties on a patent it developed several years ago. Royalties are 5% of net sales, receivable on September 30 for sales from January through June and receivable on March 31 for sales from July through December. The patent rights were distributed on July 1, 2012, and Johnson accrued royalty revenue of $50,000 on December 31, 2012, as follows: Johnson received royalties of $65,000 on March 31, 2013, and $90,000 on September 30, 2013. The patent user indicated to Johnson that sales subject to royalties for the second half of 2013 should be $600,000.
Required:
Prepare any journal entries Johnson should record during 2013 related to the royalty revenue.

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Definitions:

Job Titles

Formal designations of positions within an organization, reflecting the role and level of responsibility.

Job Search

The process of looking for employment, through various means such as online job boards, networking, or direct applications.

Interviewing

The process of asking questions and evaluating answers from individuals, typically used for research or employment selection.

Electronic Résumé

A digital version of a CV or resume, designed to be easily read by computers and electronic systems, often formatted in simple text or PDF.