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Hein Technologies Conducted The Following Cash Transactions On January

Hein Technologies conducted several cash transactions in January including: 1) Paying $712,000 to fund research for a new scanner with a 3 year useful life. 2) Paying $200,000 to develop a new product and $13,800 for patent fees, expecting the patent to be profitable for 3 years. 3) Making a $300,000 advance payment to lease office space for 10 years with no renewal.

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44 views1 page

Hein Technologies Conducted The Following Cash Transactions On January

Hein Technologies conducted several cash transactions in January including: 1) Paying $712,000 to fund research for a new scanner with a 3 year useful life. 2) Paying $200,000 to develop a new product and $13,800 for patent fees, expecting the patent to be profitable for 3 years. 3) Making a $300,000 advance payment to lease office space for 10 years with no renewal.

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Taimur Technologist
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© © All Rights Reserved
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Hein Technologies conducted the following cash

transactions on January #3099


Hein Technologies conducted the following cash transactions on January 1. 1. Paid $ 712,000
to fund internal research designed to develop a new digital scanner. The company expects the
useful life to be three years. 2. Patented a product based on internal research that could be sold
to consumers. Before applying for the patent, incurred additional costs of $ 200,000 to complete
product development ensuring the product was technologically feasible. Paid $ 13,800 for
patent filing costs and legal fees to successfully defend the patent. The company expects the
new technology will be profitable for a three- year period. 3. Leased three floors of office space.
The lease was secured by making an advance payment of $ 300,000. The lease is a 10- year
lease with no renewal options. 4. Paid $ 560,000 to renovate the leased property to prepare the
leased floors for intended use. The useful life of the renovations is estimated at 10 years. 5.
Paid $ 45,000 to acquire a franchise to distribute ICC external hard drives for a nine- year
period. Requireda. Prepare the journal entries to record each of the transactions. b. Assume
that Hein acquired Dolan Development last year. Hein recorded the following intangible assets
on the date of acquisition: • Goodwill, $ 1,500,000 • Dolan Development Trademark, $ 600,000
• Renewable licenses, $ 56,000 Prepare the year- end adjusting entries required for each of
Hein’s intangible assets. Assume that the straight- line method is used and a full year’s
amortization is taken in the year of acquisition. c. Indicate the effects of these transactions on
the current year- end income statement, balance sheet (excluding the effect on the cash
balance), and cash flow statement using the direct and indirect methods.View Solution:
Hein Technologies conducted the following cash transactions on January

ANSWER
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