Business
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Maxwell Corporation in 2014.Maxwell developed a new manufacturing process, incurring research and development costs of $225,000. The company also purchased a patent for$48,000. In early January, Maxwell capitalized $273,000 as the cost of the patents. Patent amortization expense of$13,650 was recorded based on a 20-year useful life.On July 1, 2014, Maxwell purchased a small company and as a result acquired goodwill of $40,000. Maxwell recorded a half-years amortization in 2014, based on a 10-year life ($2,000 amortization). The goodwill has an indefinite life.InstructionsPrepare all journal entries necessary to correct any errors made during 2014. Assume the books have not yet been closed for 2014.
Bubblemanis has three product lines - A, B, and C.A B C TotalSales $10,000 $9,000 $12,000 $31,000Variable costs 4,500 7,000 6,000 17,500Contribution margin 5,500 2,000 6,000 13,500Fixed costs 3,500 6,000 3,000 12,500Net income 2,000 (4,000) 3,000 1,000Product line B appears unprofitable, and management is considering discontinuing the line. How would the discontinuation of Product line B affect net income?Select one:a. increase by $2,000b. decrease by $2,000c. decrease by $4,000d. increase by $4,000