1. A patent was acquired from another company on January 1, 2019, for $25,000.The useful life is 10 years. 2. On April 2, 2019, the company was successful in obtaining a patent. The legal fees paid to an outside law firm were $8,400. The development costs paid to engineers who were employees of Bishop were $75,000. The useful life is 10 years. 3. On July 1, 2019, Bishop acquired all the assets net of the liabilities of Fargo Company. The identifiable net assets' market values at the time of purchase totaled $100,000. Bishop acknowledged the superior earnings and loyal customer following of Fargo Company. Therefore, Bishop and Fargo agreed on a total purchase price of $145,000. Any goodwill arising from the

1. A patent was acquired from another company on January 1, 2019, for $25,000.The useful life is 10 years. 2. On April 2, 2019, the company was successful in obtaining a patent. The legal fees paid to an outside law firm were $8,400. The development costs paid to engineers who were employees of Bishop were $75,000. The useful life is 10 years. 3. On July 1, 2019, Bishop acquired all the assets net of the liabilities of Fargo Company. The identifiable net assets' market values at the time of purchase totaled $100,000. Bishop acknowledged the superior earnings and loyal customer following of Fargo Company. Therefore, Bishop and Fargo agreed on a total purchase price of $145,000. Any goodwill arising from the

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

1. A patent was acquired from another company on January 1, 2019, for $25,000.The useful life
is 10 years.
2. On April 2, 2019, the company was successful in obtaining a patent. The legal fees paid to an
outside law firm were $8,400. The development costs paid to engineers who were employees of
Bishop were $75,000. The useful life is 10 years.
3. On July 1, 2019, Bishop acquired all the assets net of the liabilities of Fargo Company. The
identifiable net assets' market values at the time of purchase totaled $100,000. Bishop
acknowledged the superior earnings and loyal customer following of Fargo Company. Therefore,
Bishop and Fargo agreed on a total purchase price of $145,000. Any goodwill arising from the
purchase is not to be amortized.
4. On December 31, 2019, Bishop paid a consulting firm $17,000 to develop a trademark. In
addition, legal fees paid in connection with the trademark were $3,000. Assume a useful life of
20 years.
5. On August 1, 2019, Bishop acquired intangible asset with an indefinite useful life for $3,700.
Required
a. Determine the amortization expense for 2019.
b. Determine the book value of each of the intangible assets.
Explain your calculations.

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