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he intangible assets section of Ghazi Company at December 31, 2019, is presented elow. atents ($60,000 cost less $6,000 amortization) $54,000 ranchises ($48,000 cost less $19,200 amortization) 28,800 Total $82,800 "he patent was acquired in January 2019 and has a useful life of 10 years. The franchise vas acquired in January 2016 and also has a useful life of 10 years. The following cash ransactions may have affected intangible assets during 2020. Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company. Jan – June Developed a new product, incurring $100,000 in research costs and $68,000 in development costs prior to technological feasibility. A patent was granted for the product on July 1. Its useful life is equal to its 20-year

he intangible assets section of Ghazi Company at December 31, 2019, is presented elow. atents ($60,000 cost less $6,000 amortization) $54,000 ranchises ($48,000 cost less $19,200 amortization) 28,800 Total $82,800 "he patent was acquired in January 2019 and has a useful life of 10 years. The franchise vas acquired in January 2016 and also has a useful life of 10 years. The following cash ransactions may have affected intangible assets during 2020. Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company. Jan – June Developed a new product, incurring $100,000 in research costs and $68,000 in development costs prior to technological feasibility. A patent was granted for the product on July 1. Its useful life is equal to its 20-year

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Q 10 – The intangible assets section of Ghazi Company at December 31, 2019, is presented below. Patents ($60,000 cost less $6,000 amortization) $54,000 Franchises ($48,000 cost less $19,200 amortization) 28,800 Total $82,800 The patent was acquired in January 2019 and has a useful life of 10 years. The franchise was acquired in January 2016 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2020. Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company. Jan – June Developed a new product, incurring $100,000 in research costs and $68,000 in development costs prior to technological feasibility. A patent was granted for the product on July 1. Its useful life is equal to its 20-year legal life. 3 Sept. 1 Paid $58,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October. Oct. 1 Acquired a franchise for $100,000. The franchise has a useful life of 40 years. Instructions (a). Prepare journal entries to record the transactions above. (b). Prepare journal entries to record the 2020 amortization expense. (c). Prepare the intangible assets section of the statement of financial position at December 31, 2020.
Transcribed Image Text:Q 10 – The intangible assets section of Ghazi Company at December 31, 2019, is presented below. Patents ($60,000 cost less $6,000 amortization) $54,000 Franchises ($48,000 cost less $19,200 amortization) 28,800 Total $82,800 The patent was acquired in January 2019 and has a useful life of 10 years. The franchise was acquired in January 2016 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2020. Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company. Jan – June Developed a new product, incurring $100,000 in research costs and $68,000 in development costs prior to technological feasibility. A patent was granted for the product on July 1. Its useful life is equal to its 20-year legal life. 3 Sept. 1 Paid $58,000 to an extremely large defensive lineman to appear in commercials advertising the company's products. The commercials will air in September and October. Oct. 1 Acquired a franchise for $100,000. The franchise has a useful life of 40 years. Instructions (a). Prepare journal entries to record the transactions above. (b). Prepare journal entries to record the 2020 amortization expense. (c). Prepare the intangible assets section of the statement of financial position at December 31, 2020.
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