please answer in detail. Swifty Enterprises is a large Canadian company traded o
ID: 2588850 • Letter: P
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please answer in detail.
Swifty Enterprises is a large Canadian company traded on the Toronto Stock Exchange. Swifty purchased two copyrights during 2017. The first copyright was purchased on February 1 for $16,100, and was expected to have a useful life until the end of December, 2019. The second copyright was purchased on July 1 for $148,800, and was expected to have an indefinite useful life. Swifty's fiscal year-end was December 31. On July 1, 2018, Swifty paid $7,920 in legal fees to successfully defend the first copyright in court. On September 1, 2018, Swifty determined that the second copyright would no longer have an indefinite useful life, and in fact would have a useful life of another 8 years, beginning September 1, 2018. On April 1, 2019, Swifty sold the second copyright for $155,650. Prepare the journal entries on the books of Swifty to record the above transactions. (Hint: don't forget the year-end amortization entries). (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Feb. 1, 2017 1201 ec. 31, 2017 ul. 1, 2018 Sept. 1, 2018 Apr. 1, 2019 To record amortization of copyrights)Explanation / Answer
Date Account titles and Explanation Debit Credit Feb 1st 2017 Copywright A/c 16100 Bank A/c 16100 (Assuming 1st Copy wright purchased by Cash) July 1st 2017 Copywright A/c 148800 Bank A/c 148800 (Assuimg 2nd Copy wright Purchased by Cash) Dec 31st 2017 Amortisation A/c 5060 Accumulated Amortisation on Copywright A/c 5060 (Amortisation on 1st Copywright is calculated as 16100/35*11 from 1st Feb 2017 to Dec 31st 2017) The 2nd Copy wright has indefinite life and is tested for impairment and assumed that it has Passed the Impairement as on Dec 31st 2017 July 1st 2018 Legal and Professional Charges 7920 Bank A/c 7920 (Being legal Charges paid on defending 1st Copywright -expensed off Sep 1st 2018 No Entry 0 No Entry 0 Dec 31st 2018 Amortisation A/c 11720 Accumulated Amortisation on Copywright A/c 11720 (Amortisation on 1st Copywright is calculated as 16100/35*12 from 1st Jan 2018 to Dec 31st 2018 I.e.,5520) (the 2nd Copy wright Amortisation is calcualted for 4 months from Sep'18 to Dec'18 i.e., 148800/96*4 = 6200, SO total amortisation is 5520+6200) Apr 1st 2019 Amortisation A/c 4650 Accumulated Depreciation on Copywright A/c 4650 (the 2nd Copy wright Amortisation is calcualted for 4 months from Jan'18 to Mar'18 i.e., 148800/96*3 = 4650) Apr 1st 2019 Bank A/c 155650 Accumulated Amortisation on Copywright A/c 10850 Copywrights A/c 148800 Profit on Sale of assets 17700 (Being Gain relaised on sale of 2nd copy wright after netting off amortisation of 6200 and 4650 from sep'18 to Apr'19)
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