Campbell Clothing produces men's ties. The following budgeted and actual amounts are for 2016:

Answer:

A. Dr Amortization expense $43,750

Cr Patents $43,750

B. Dr Amortization expense $5,230

Cr Patents $5,230

C. Dr Amortization expense $14,000

Cr Franchises $14,000

Explanation:

Journal entry preparations

A. Dr Amortization expense $43,750

($350,000÷8 years = $43,750)

Cr Patents $43,750

(Recording amortization for the patent)

B. Dr Amortization expense $5,230

($52,300÷10 years = $5,230)

Cr Patents $5,230

(Recording amortization for the patent)

C. Dr Amortization expense $14,000

($70,000÷5 years = $14,000)

Cr Franchises $14,000

(Recording amortization for franchises)

For Part a, the equilibrium price that Dumphy and Funke will set is $30. In Part b, the profits for Dumphy and Funke at this equilibrium price amount to $0. Regarding Part c, both artists are expected to engage in price competition after experiencing a decline in demand. To clarify, the price each artist sets equals their marginal cost, thus establishing equilibrium at MC = $30.

The depreciable life of an asset is crucial for the financial manager. Generally, a shorter depreciable life is advantageous, as it leads to quicker cash flow circulation. This concept of depreciation allows for the expense of financial or intangible resources to be allocated over their useful lives. It indicates the extent to which an asset's value diminishes over time. For both taxation and accounting, long-term assets can be depreciated, and the duration allocated to these assets significantly influences the cash flow. Hence, shorter depreciable lives are more favorable compared to longer ones due to the expedited influx of cash for finance managers.