Oriole Ltd. has these transactions related to intangible assets and goodwill in 2021, its first year of operations: Paid for a patent with an estimated useful life of five years for $40,700. The company that sold the patent to Collins registered the patent 10 years ago. Jan. 2 Apr. 1 Acquired another company using cash and recorded goodwill of $301,800 as part of the purchase. Acquired a franchise for $236,600 cash. The franchise agreement is renewable without charge and not expected to expire. July 1 Sept. 1 Paid for research costs of $154,600. 30 Paid for development costs of $46,200. A marketable product has been identified and resources have been secured s that production will start next year. Dec. 31 Recorded annual amortization. 31 Tested the intangible assets for impairment. Fair values exceeded carrying amounts for all intangible assets. Also test goodwill and determined that it had a fair value of $270,310.
Oriole Ltd. has these transactions related to intangible assets and goodwill in 2021, its first year of operations: Paid for a patent with an estimated useful life of five years for $40,700. The company that sold the patent to Collins registered the patent 10 years ago. Jan. 2 Apr. 1 Acquired another company using cash and recorded goodwill of $301,800 as part of the purchase. Acquired a franchise for $236,600 cash. The franchise agreement is renewable without charge and not expected to expire. July 1 Sept. 1 Paid for research costs of $154,600. 30 Paid for development costs of $46,200. A marketable product has been identified and resources have been secured s that production will start next year. Dec. 31 Recorded annual amortization. 31 Tested the intangible assets for impairment. Fair values exceeded carrying amounts for all intangible assets. Also test goodwill and determined that it had a fair value of $270,310.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hi there,
I'm not sure how to orgnize and enter this
Transcribed Image Text:Oriole Ltd. has these transactions related to intangible assets and goodwill in 2021, its first year of operations:
Paid for a patent with an estimated useful life of five years for $40,700. The company that sold the patent to Collins
registered the patent 10 years ago.
Jan. 2
Apr. 1
Acquired another company using cash and recorded goodwill of $301,800 as part of the purchase.
July 1
Acquired a franchise for $236,600 cash. The franchise agreement is renewable without charge and not expected to
expire.
Sept. 1
Paid for research costs of $154,600.
30
Paid for development costs of $46,200. A marketable product has been identified and resources have been secured so
that production will start next year.
Dec. 31
Recorded annual amortization.
31
Tested the intangible assets for impairment. Fair values exceeded carrying amounts for all intangible assets. Also tested
goodwill and determined that it had a fair value of $270,310.
Transcribed Image Text:Prepare the journal entries to record the above transactions. Assume all costs incurred during January through September were
incurred for cash. (List all debit entries before credit entries. Credit account titles are automatically indented when
the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal
entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
(To record amortization expense)
(To record goodwill impairment)
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