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

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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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 $_________________

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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