Pharoah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then:Jan.2 Purchased patent (8-year life) $338,000Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000Apr.1 Purchased goodwill (indefinite life) 307,000July1 Purchased franchise with 10-year life; expiration date July 1, 2030 259,000 1 Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 33,000Aug.1 Payment for copyright (5-year life) 142,800 1 Purchased trademark (3-year life) 14,400 1 Purchased customer list (2-year life) 9,600Sept.1 Research costs 236,000 $1,360,800 Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.

The practice of documenting commercial transactions for the first time in the books of accounts is…

Answered: haroah Limited organized late in 2019…

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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Pharoah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then:

Jan.	2	Purchased patent (8-year life)	$338,000
Mar.	31	Costs to search for new ways to apply patent that was purchased on Jan. 2	21,000
Apr.	1	Purchased goodwill (indefinite life)	307,000
July	1	Purchased franchise with 10-year life; expiration date July 1, 2030	259,000
	1	Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1	33,000
Aug.	1	Payment for copyright (5-year life)	142,800
	1	Purchased trademark (3-year life)	14,400
	1	Purchased customer list (2-year life)	9,600
Sept.	1	Research costs	236,000
			$1,360,800

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.

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