Barb Company has provided information on intangible assets as follows:A patent was purchased from Lou Company for $1,500,000 on January 1, 2018. Barb estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou's accounting records at a net book value of $1,250,000 when Lou sold it to Barb.During 2019, a franchise was purchased from Rink Company for $500,000. In addition, 5% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2019 was $2,000,000. Barb estimates the useful life of the franchise to be 10 years and takes a full year's amortization in the year of purchase.Barb incurred R&D costs in 2019 as follows:Materials and equipment$120,000Personnel140,000Indirect costs60,000 $320,000Barb estimates that these costs will be recouped by December 31, 2020.On January 1, 2019, Barb estimates, based on new events, that the remaining life of the patent purchased on January 1, 2018, is only 5 years from January 1, 2019.Required:Question Content Area1. Prepare the intangibles assets section of Barb's balance sheet at December 31, 2019.BARB COMPANYIntangible Assets Section of Balance SheetDecember 31, 2019Patent, net (Schedule 1)$fill in the blank a921dffd1068040_1Franchise from Rink Company, net (Schedule 2)fill in the blank a921dffd1068040_2Intangible assets$fill in the blank a921dffd1068040_3 Schedule 1: Computation of Patent from Lou Company Cost of patent at date of purchase$fill in the blank a921dffd1068040_4Amortization of patent for 2018fill in the blank a921dffd1068040_5 $fill in the blank a921dffd1068040_6Amortization of patent for 2019fill in the blank a921dffd1068040_7Patent balance$fill in the blank a921dffd1068040_8 Schedule 2: Computation of Franchise from Rink Company Cost of franchise at date of purchase$fill in the blank a921dffd1068040_9Amortization of franchise for 2019fill in the blank a921dffd1068040_10Franchise balance$fill in the blank a921dffd1068040_11

Intangible Assets: The assets that are not physical in nature, and add value to business in the…

Answered: Barb Company has provided information…

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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1. Prepare the intangibles assets section of Barb's balance sheet at December 31, 2019.

BARB COMPANYIntangible Assets Section of Balance SheetDecember 31, 2019

Patent, net (Schedule 1)	$fill in the blank a921dffd1068040_1
Franchise from Rink Company, net (Schedule 2)	fill in the blank a921dffd1068040_2
Intangible assets	$fill in the blank a921dffd1068040_3

Schedule 1: Computation of Patent from Lou Company

Cost of patent at date of purchase	$fill in the blank a921dffd1068040_4
Amortization of patent for 2018	fill in the blank a921dffd1068040_5
	$fill in the blank a921dffd1068040_6
Amortization of patent for 2019	fill in the blank a921dffd1068040_7
Patent balance	$fill in the blank a921dffd1068040_8

Schedule 2: Computation of Franchise from Rink Company

Cost of franchise at date of purchase	$fill in the blank a921dffd1068040_9
Amortization of franchise for 2019	fill in the blank a921dffd1068040_10
Franchise balance	$fill in the blank a921dffd1068040_11

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Materials and equipment	$120,000
Personnel	140,000
Indirect costs	60,000
	$320,000