2011 Financial 2 Update
Update for the 2011 Edition
Last Updated April 4, 2011
SECTION A: TEXT AND LECTURE ERRATA
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:
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?
Receipts in Year 2 applied to 12/31/Year 1 receivables
Unearned royalties, 12/31/Year 2
Preliminary Year 2 royalty income
Unearned royalties, 12/31/Year 1
Receivables balance, 12/31/Year 2
Royalty income, Year 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.