Carla Vista Co., organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025 and 2026. 7/1/25 10/1/25 12/31/25 1/2/26 3/1/26 4/1/26 6/1/26 9/1/26 Intangible Assets 8-year franchise; expiration date 6/30/33 Advance payment on laboratory space (2-year lease) Net loss for 2025 including state incorporation fee, $3,000, and related legal fees of organizing, $7,000 (all fees incurred in 2025) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $48,000 25,800 17,800 80,600 82,000 279,600 12,765 165,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2026, recording any necessary amortization. (Ignore income tax effects.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
Carla Vista Co., organized in 2024, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2025 and 2026. 7/1/25 10/1/25 12/31/25 1/2/26 3/1/26 4/1/26 6/1/26 9/1/26 Intangible Assets 8-year franchise; expiration date 6/30/33 Advance payment on laboratory space (2-year lease) Net loss for 2025 including state incorporation fee, $3,000, and related legal fees of organizing, $7,000 (all fees incurred in 2025) Patent purchased (10-year life) Cost of developing a secret formula (indefinite life) Goodwill purchased (indefinite life) Legal fee for successful defense of patent purchased above Research and development costs $48,000 25,800 17,800 80,600 82,000 279,600 12,765 165,000 Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as of December 31, 2026, recording any necessary amortization. (Ignore income tax effects.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.)
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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Transcribed Image Text:Current Attempt in Progress
Carla Vista Co., organized in 2024, has set up a single account for all intangible assets. The following summary
discloses the debit entries that have been recorded during 2025 and 2026.
7/1/25
10/1/25
12/31/25
1/2/26
3/1/26
4/1/26
6/1/26
9/1/26
Intangible Assets
8-year franchise; expiration date 6/30/33
Advance payment on laboratory space (2-year lease)
Net loss for 2025 including state incorporation fee, $3,000,
and related legal fees of organizing, $7,000 (all fees incurred in 2025)
Patent purchased (10-year life)
Cost of developing a secret formula (indefinite life)
Goodwill purchased (indefinite life)
Legal fee for successful defense of patent purchased above
Research and development costs
$48,000
25,800
17,800
80,600
82,000
279,600
12,765
165,000
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for
distinct types of intangibles. Make the entries as of December 31, 2026, recording any necessary amortization.
(Ignore income tax effects.) (Credit account titles are automatically indented when amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the
amounts. List all debit entries before credit entries.)
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