E9-14 (Algo) Computing and Reporting the Acquisition and Amortization of Three Different IntangibleAssets [LO 9-6]Bluestone Company had three intangible assets at the end of the current year:a. A patent purchased this year from Miller Company on January 1 for a cash cost of $6,400. When purchased, the patent had anestimated life of 16 years.b. A trademark was registered with the federal government for $3,500. Management estimated that the trademark could be worth asmuch as $110,000 because it has an indefinite life.c. Computer licensing rights were purchased this year on January 1 for $30,000. The rights are expected to have a five-year useful lifeto the company.Required:1. Compute the acquisition cost of each intangible asset.2. Compute the amortization of each intangible for the current year ended December 313. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the currentyear.

1. Acquisition Cost of Each Intangible AssetPatent: The acquisition cost is the cash paid for it,…

Answered: E9-14 (Algo) Computing and Reporting…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EA: The following intangible assets were purchased by Goldstein Corporation: A. A patent with a...

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The following intangible assets were purchased by Goldstein Corporation: A. A patent with a remaining legal life of twelve years is bought, and Goldstein expects to be able to use it for seven years. B. A copyright with a remaining life of thirty years is purchased, and Goldstein expects to be able to use it for ten years. For each of these situations, determine the useful life over which Goldstein will amortize the intangible assets.
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
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E8-20 (Algo) Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets LO8-6 Trotman Company had three intangible assets at the end of the current year: a. Computer software and website development technology purchased on January 1 of the prior year for $80,000. The technology is expected to have a four-year useful life to the company with no residual value. b. A patent purchased from lan Zimmer on January 1 of the current year for a cash cost of $21,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life. c. A trademark purchased for $21,000 on November 1 of the current year. Management decided the trademark has an indefinite life. Required: 1. Compute the amortization of each intangible at December 31 of the current year. The company does not use contra-accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the…
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, 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. polnts еВook Print Required: References 1. 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 income statement for the current year. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 3B Compute the acquisition…
Required information P8-8 (Algo) Determining Financial Statement Effects of Activities Related to Various Long-Lived Assets LO8-2, 8-3, 8-6 [The following information applies to the questions displayed below.] During the current year ending on December 31, BSP Company completed the following transactions: a. On January 1, purchased a patent for $29,000 cash (estimated useful life, five years). b. On January 1, purchased the assets (not detailed) of another business for $153,000 cash, including $14,000 for goodwill. The company assumed no liabilities. Goodwill has an indefinite life. c. On December 31, constructed a storage shed on land leased from D. Heald. The cost was $29,600. The company uses straight-line depreciation. The lease will expire in six years. (Amounts spent to enhance leased property are capitalized as intangible assets called Leasehold Improvements.) d. Total expenditures for ordinary repairs and maintenance were $5,300 during the current year. e. On December 31 of the…
Determining Carrying Value and Amortization of Intangible Assets Review the following information pertaining to Denzel Company. 1. A patent was purchased on January 2 of Year 1 for $104,000 when the remaining legal life was 16 years. On January 2 of Year 3, Denzel determined that the remaining useful life of the patent was only eight years from the date of its acquisition. 2. On January 1 of Year 3, Denzel Company purchased a second patent for $128,000 cash. At January 1 of Year 3, a total of 6 years of the patent's legal life of 20 years had expired. 3. On June 30 of Year 3, Denzel Company paid a firm $12,800 for a new trademark. Denzel considers the life of the trademark to be indefinite. 4. On November 1 of Year 3, Denzel Company acquired all noncash assets and assumed all liabilities of Lee Company at a cash purchase price of $192,000. Denzel determined that the fair value of the identifiable net assets acquired in the transaction is $187,200. Required a. What is the carrying value…
Ivanhoe Company, organized in 2022, has these transactions related to intangible assets in that year: Jan. Purchased a patent (5-year life) $305,500. Apr. 1. Goodwill purchased (indefinite life) $338,400. July Acquired a 9-year franchise; expiration date July 1, 2031, $676,800. Sept. 1 Research and development costs $173,900.
Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Company on January 1 for a cash cost of $4,000. When purchased, the patent had an estimated life of 10 years. b. A trademark was registered with the federal government for $11,000. Management estimated that the trademark could be worth as much as $260,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $36,000. The rights are expected to have a four-year useful life to the company. Required: 1. 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 income statement for the current year.
! Required information E8-4 (Algo) Determining Financial Statement Effects of an Asset Acquisition and Depreciation (Straight-Line Depreciation) LO8-2, 8-3 [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $26,000. On the date of delivery, January 2, the company paid $7,000 on the machine, with the balance on credit at 11 percent interest due in six months. On January 3, it paid $1,100 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,700. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $4,000. E8-4 Part 3 3. Compute the depreciation expense to be reported for Year 1. Depreciation expense
Computing Impairment of Intangible Assets Stiller Company had the following information for its three intangible assets. 1. Patent: A patent was purchased for $140,000 on June 30 of Year 1; Stiller estimated the useful life of the patent to be 15 years. On December 31 of Year 3, the estimated future cash flows attributed to the pat were $119,000. The fair value of the patent was $105,000. 2. Trademark: A trademark was purchased for $7,000 on August 31 of Year 2. The trademark is considered to have an indefinite life. The fair value of the trademark on December 31 of Year 3 is $3,500. 3. Goodwill: Stiller recorded goodwill in January of Year 2, related to a purchase of another company. The carrying value of goodwill is $42,000 on December 31 of Year 3. On December 31 of Year 3, the segment for which the goodwill relates had a fair value of $812,000. The book value of the net assets of the segment (including goodwill) is $840,000. a. Classify each of the intangible assets above as a…
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