2011 Financial 2 Update - 2011 Financial 2 Update Financial...

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2011 Financial 2 Update Financial 2 Update for the 2011 Edition Last Updated April 4, 2011 SECTION A: TEXT AND LECTURE ERRATA Item A.1 Pg. F2-9, Example - Royalties Received in Advance There is a typo in the text and calculation in this example (corrections highlighted): TAG Company receives royalties on its patents in two ways. In some cases, advance royalties are received and in other cases royalties are remitted within sixty days after year end. Cash receipts for the year were $18,000 . These data are included in TAG Company's December 31 balance sheets: Year 1 Year 2 Difference Royalties receivable $100,000 $95,000 ($5,000) Unearned royalties 70,000 45,000 25,000 During Year 2, TAG Company received royalty remittances of $180,000. In its income statement for the year ended December 31, Year 2, what should TAG Company's royalty income be? Cash receipts $18,000 $180,000 Receipts in Year 2 applied to 12/31/Year 1 receivables (100,000) Cash remaining 80,000 Unearned royalties, 12/31/Year 2 (45,000) Preliminary Year 2 royalty income 35,000 Unearned royalties, 12/31/Year 1 70,000 Receivables balance, 12/31/Year 2 95,000 Royalty income, Year 2 $200,000 Item A.2 Pg. F2-16, Example – Franchisee’s Intangible Assets The text of this example should state that the expected life of the franchise is 10 years. Item A.3
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2011 Financial 2 Update - 2011 Financial 2 Update Financial...

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