E7-12 On January 1, 2017, Haley Company had a balance of $360,000 of goodwill on its bal- ance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions. Jan. 2 Purchased a patent (5-year life) $280,000. Acquired a 9-year franchise; expiration date July 1, 2026, $540,000. Research and development costs $185,000. bloa July 1 Sept. 1 Instructions (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2017 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2017. the intangible asset account balances should be on December 31, 2017. nting policy to amortize imated

E7-12 On January 1, 2017, Haley Company had a balance of $360,000 of goodwill on its bal- ance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions. Jan. 2 Purchased a patent (5-year life) $280,000. Acquired a 9-year franchise; expiration date July 1, 2026, $540,000. Research and development costs $185,000. bloa July 1 Sept. 1 Instructions (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2017 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2017. the intangible asset account balances should be on December 31, 2017. nting policy to amortize imated

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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112.
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On May 1, 2014 Barton Corporation purchased for cash of $37.500 a patent with a useful ife of 10 years, Give the entries to record: a. The purchase of the patent. b. The amortization on December 31, 2014 (calculated to the nearest whole month). Enter the transaction letter as the description when entering the transactions in the journal. Dates must be entered in the format ddimmm (1e. January 15 would be 15/Jan). Ensure accuracy in your calculations and round only your final answer to the nearest whole dollar, Date General Journal Account/Explanation Page GJ2 F Debit Credit