Cash in the amounts of 12000 and 20000 was paid and

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Reference no: EM13575852

Lacome company produces computer software that Kozuch, Inc., sells. Lacoma recieves a royalty of 15 percent of sales. Kozuch pays royalties to Lacoma semiannually 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 Kozuch and royalty income for Lacoma in the amounts of $12,000 were accrued on December 31, 2013. Cash in the amounts of $12,000 and $20,000 was paid and recieved on May 1 and November 1, 2014 respectively. Software sales dueing the July to December 2014 peroid totaled $300,000.

Calculate the amount of royalty expense for Kozuch and royalty income for Lacoma during 2014.

Record the adjusting entry that each company made on December 31, 2014

Reference no: EM13575852

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