6.Bluestone Company had three intangible assets at the end of the current year:a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $6,000. When purchased, thepatent had an estimated life of 12 years.b. A trademark was registered with the federal government for $4,000. Management estimated that thetrademark could be worth as much as $120,000 because it has an indefinite life.c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected tohave a six-year useful life to the company.polntsеВookPrintRequired:References1. Compute the acquisition cost of each intangible asset.2. Compute the amortization of each intangible for the current year ended December 31.3. Show how these assets and any related expenses should be reported on the balance sheet and incomestatement for the current year.Complete this question by entering your answers in the tabs below.Reg 1Reg 2Reg 3AReg 3BCompute the acquisition cost of each intangible asset.Acquisition CostPatentTrademarkLicensing Rights< Req 1Req 2 >

1. Acquisition cost: Patent: $6,000 Trademark: $4,000 Licensing right: $42,000 2. Amortization : Amortization charge for patent = Total costEstimated life =$6,00012 =$500 Patent: $500 Trademark: $0 Amortization charge for licensing right = Total costEstimated life =$42,0006 =$7,000 Licensing right: $7,000 3. Intangible assets = $6,000-$4,000-$42,000-$500-$7,000 =$44,500 The intangible asset would be increased by $44,500 in the balance sheet of the company. The amortization expense would be increased by $7,500 in the income statement that reduces the net income of the company.

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Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $6,000. When purchased, the patent had an estimated life of 12 years. b. A trademark was registered with the federal government for $4,000. Management estimated that the trademark could be worth as much as $120,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company. Required:

Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $6,000. When purchased, the patent had an estimated life of 12 years. b. A trademark was registered with the federal government for $4,000. Management estimated that the trademark could be worth as much as $120,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company. Required:

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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