need help on how to calculate this problem step by step, please. Information concerning Sure Corporation's intangible assets is as follows: On January 1, 2019, Sure signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $81,000. Of this amount, $21,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $45,600. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sure's revenue from the franchise for 2019 was $800,000. Sure estimates the useful life of the franchise to be 5 years. Sure incurred $69,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $17,440. Sure estimates that the useful life of the patent will be 10 years. A trademark was purchased from Walton Company for $41,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $11,500 were paid on July 1, 2019. Sure estimates that the useful life of the trademark will be 25 years from the date of acquisition. Required: 1. Prepare a schedule showing the intangible assets section of Sure's balance sheet at December 31, 2019. Round final answers to the nearest dollar.

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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I need help on how to calculate this problem step by step, please.

Information concerning Sure Corporation's intangible assets is as follows:

On January 1, 2019, Sure signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $81,000. Of this amount, $21,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $45,600. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sure's revenue from the franchise for 2019 was $800,000. Sure estimates the useful life of the franchise to be 5 years.
Sure incurred $69,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $17,440. Sure estimates that the useful life of the patent will be 10 years.
A trademark was purchased from Walton Company for $41,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $11,500 were paid on July 1, 2019. Sure estimates that the useful life of the trademark will be 25 years from the date of acquisition.

Required:

1. Prepare a schedule showing the intangible assets section of Sure's balance sheet at December 31, 2019. Round final answers to the nearest dollar.

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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