Intangible Long-Term Assets Track Town Co. had the following transactions involving intangible assets: Purchased a patent for leather soles for $10,000 and estimated its useful life to be Jan. 1 10 years. Purchased a copyright for a design for $15,000 with a life left on the copyright of Apr. 1 25 years. The estimated remaining (economic) life of the copyright is five years. Signed a five-year franchise agreement and opened a Starting Line high-tech July 1 running shoe store. Paid $50,000 to the franchisor. Required: 1. Using the straight-line method, calculate the amortization of the patent, copyright, and Franchise. a. Patent 10,000 x b. Copyright s c. Franchise s Feedback 2. Prepare general journal entries to record the end-of-year amortizations. Page: 1 ACCOUNT TITLE DOC. POST. DATE DEBIT CREDIT NO. REF. 20-- 1. Dec. 31 2 2 3 3. 4 Dec. 31 6. 7 Dec. 31 8. II II II

Intangible Long-Term Assets Track Town Co. had the following transactions involving intangible assets: Purchased a patent for leather soles for $10,000 and estimated its useful life to be Jan. 1 10 years. Purchased a copyright for a design for $15,000 with a life left on the copyright of Apr. 1 25 years. The estimated remaining (economic) life of the copyright is five years. Signed a five-year franchise agreement and opened a Starting Line high-tech July 1 running shoe store. Paid $50,000 to the franchisor. Required: 1. Using the straight-line method, calculate the amortization of the patent, copyright, and Franchise. a. Patent 10,000 x b. Copyright s c. Franchise s Feedback 2. Prepare general journal entries to record the end-of-year amortizations. Page: 1 ACCOUNT TITLE DOC. POST. DATE DEBIT CREDIT NO. REF. 20-- 1. Dec. 31 2 2 3 3. 4 Dec. 31 6. 7 Dec. 31 8. II II II

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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