A. The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,000,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,700,000. B. Included in the assets purchased from Heinrich was a patent valued at $90,000. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for 8 moreyears; C.UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $350,000. The contractual life of the franchise is 10 years.

A. The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,000,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,700,000. B. Included in the assets purchased from Heinrich was a patent valued at $90,000. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for 8 moreyears; C.UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $350,000. The contractual life of the franchise is 10 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Dd2)

A. The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS
completed the purchase of Heinrich Corporation for $3,000,000 in cash. The fair value of the net identifiable assets of
Heinrich was $2,700,000.
B. Included in the assets purchased from Heinrich was a patent valued at $90,000. The original legal life of the patent was
20 years; there are 12 years remaining, but UTS believes the patent will be useful for 8 moreyears;
C.UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $350,000. The contractual life of the
franchise is 10 years.
Required:
1. Record amortization expense for the intangible assets at December 31, 2024.
2. Prepare the intangible asset section of the December 31, 2024, balance sheet.

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