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.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 8P
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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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9e73faeb-754b-4598-beaf-65c4605dc4b7%2F43a2fdf5-f3d6-441e-b89d-a6974d336f95%2F6kd34u_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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