On January 1, 2027, Sheridan Company had a balance of $417,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 $ Assets Patents + Franchise $ $

On January 1, 2027, Sheridan Company had a balance of $417,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2027, the company had the following additional transactions. Jan. 2 Purchased a patent (6-year life) $301,350. July 1 Acquired a 9-year franchise; expiration date July 1, 2036, $633,600. Sept. 1 Research and development costs $189,000. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2027 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2027. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Cash (a) Bal. $ Jan. 2 $ Assets Patents + Franchise $ $

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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