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136B_w09_mt1 - 26 JOURNAL ENTRIES For each item below...

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26. JOURNAL ENTRIES: For each item below, record the appropriate journal entry: A. Sell goods on credit for $100,000 excluding sales taxes, and also cash sales where you collected $54,500 including sales taxes. The sales tax rate is 9%. B. Pay $200,000 to an outside consultant for expert scientific analysis in connection with the research and development of a vaccine. C. Purchase an expensive $250,000 piece of equipment for use in the lab in connection with ongoing research and development. D. Relative to the equipment in (C) above, if the equipment is to be used for 10 years and will have no salvage value, what (if any) journal entry is required at the end of the first year? E. A lawsuit has been filed against the company which seeks to recover $500,000 in damages. The attorneys indicate that although the amount of the loss could reach the $500,000 mark, the likelihood is remote. F. Same as C above, except the attorneys indicate that a loss is probable and they estimate the loss could be anywhere between $50,000 and $200,000. G. Same as C above, except the attorneys indicate that a loss is probable for an estimated $25,000. H. We are suing a competitor for infringement upon our patented technology. Our attorneys indicate that it is probable that we will recover $1,000,000 from the lawsuit. I. Once we have completed our research and development, we pay an attorney $200,000 to secure a patent on the resulting process which we plan to begin immediate production.
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