Janes Company provided the following information on intangible assets: A patent was purchased from the Lou Company for $950,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $400,000 when Lou sold it to Janes. During 2021, a franchise was purchased from the Rink company for $550,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. Janes incurred research and development costs in 2021 as follows: Materials and supplies $145,000 Personnel 185,000 Indirect costs 65,000 Total $395,000 Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. Required: Prepare a schedule showing the intangible asset section of Janes’s December 31,2021, balance sheet. Partial Balance Sheet December 31, 2021 Intangible assets: ______________ $_________________ ______________ __________________ ______________ __________________ Total intangibles
Janes Company provided the following information on intangible assets: A patent was purchased from the Lou Company for $950,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $400,000 when Lou sold it to Janes. During 2021, a franchise was purchased from the Rink company for $550,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. Janes incurred research and development costs in 2021 as follows: Materials and supplies $145,000 Personnel 185,000 Indirect costs 65,000 Total $395,000 Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. Required: Prepare a schedule showing the intangible asset section of Janes’s December 31,2021, balance sheet. Partial Balance Sheet December 31, 2021 Intangible assets: ______________ $_________________ ______________ __________________ ______________ __________________ Total intangibles
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Janes Company provided the following information on intangible assets:
- A patent was purchased from the Lou Company for $950,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $400,000 when Lou sold it to Janes.
- During 2021, a franchise was purchased from the Rink company for $550,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase.
- Janes incurred research and development costs in 2021 as follows:
Materials and supplies $145,000
Personnel 185,000
Indirect costs 65,000
Total $395,000
- Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years.
Required:
- Prepare a schedule showing the intangible asset section of Janes’s December 31,2021,
balance sheet .
Partial Balance Sheet
December 31, 2021
Intangible assets:
______________ $_________________
______________ __________________
______________ __________________
Total intangibles $_________________
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