Calculate the amount of royalty expense for Batangas Company

Reference no: EM132699686

Question - Accrual of Royalties

Elisa Diaz Company produces computer software that Batangas Company sells. Diaz receives a royalty of 15% of sales. Batangas Company pays royalties to Diaz Company on a semi-annual basis- on May 1 for sales made in July through December of the previous year and on November 1 for sales made in January through June of the current year. Royalty expense for Batangas Company and royalty income for Diaz Company in the amount of P600,000 were accrued on December31, 2010. Cash in the amounts of P600,000 and P1,000,000 was paid and received on May 1 and Nov 1, 2011, respectively. Software sales during the July to December 2011 period totaled P15,000,000.

Required -

1. Calculate the amount of royalty expense for Batangas Company and royalty income for Diaz during 2011.

2. Record the adjusting entry that each company made on December 31, 2011.

Reference no: EM132699686

Questions Cloud

Calculate the depreciation expense for the second year : Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the second year

Nongovernmental organization mission : Each student should present a description (in your own words) of an individual nongovernmental organization's (NGO's) mission and capabilities

Risk management within homeland security enterprise : Examine the role of risk management within the homeland security enterprise.

What is the corresponding expected net profit : Assume that only the passengers who show up for the flight pay the fare of $130. What is the corresponding expected net profit

Calculate the amount of royalty expense for Batangas Company : Question - Accrual of Royalties - Calculate the amount of royalty expense for Batangas Company and royalty income for Diaz during 2011

Systemic heating of the earth water masses : Global warming is the systemic heating of the earth's water masses, atmosphere, and surface due to human activity that leads to greenhouse gas emissions

Explaining on line-by-line basis correct adjustment entry : Discuss whether the entries suggested by Li Chen are correct, explaining on a line-by-line basis the correct adjustment entry

Intergovernmental relations and management : Describe the importance of the questions as they relate specifically to state and local governments.

Discusses why critical infrastructure protection : Discusses why critical infrastructure protection, security, and resilience are vital to U.S. public confidence when considering the Nation's safety, prosperity

User Account

All Pages