Pharoah Company has provided information on intangible assets as follows.A patent was purchased from Shamrock Company for $1,700,000 on January 1, 2024. Pharoah estimated the remaining useful life ofthe patent to be 10 years. The patent was carried in Shamrock's accounting records at a net book value of $1,700,000 when Shamrocksold it to Pharoah.During 2025, a franchise was purchased from Flounder Company for $460,000. In addition, 5% of revenue from the franchise must bepaid to Flounder. Revenue from the franchise for 2025 was $2,410,000. Pharoah estimates the useful life of the franchise to be 10years and takes a full year's amortization in the year of purchase.Pharoah incurred research and development costs in 2025 as follows.Materials and equipmentPersonnelIndirect costs$162,000184,000113,000$459,000Pharoah estimates that these costs will be recouped by December 31, 2028. The materials and equipment purchased have noalternative uses.On January 1, 2025, because of recent events in the field, Pharoah estimates that the remaining life of the patent purchased onJanuary 1, 2024, is only 5 years from January 1, 2025. Prepare a schedule showing the intangibles section of Pharoah's balance sheet at December 31, 2025. (Enter account name onlyand do not provide descriptive information.)PHAROAH COMPANYIntangibles Section of Balance Sheet$LA$LA

Introduction:- Intangible asset: an identifiable non-monetary asset without physical substance. The following examples of intangible assets as follows:- Goodwill brand recognition Intellectual property, such as patents, trademarks, and copyrights etc...Explanations:- i)Patent Cost of purchase $ 17,00,000 Less:-2024 Amortization ($17,00,000/10) $ 1,70,000 Book value $ 15,30,000 Less:-2025 Amortization ($1530000/5) $ 3,06,000 Balance at December 2025 $ 12,24,000 ii)Franchise Cost of franchise $460,000 Less:-2025 Amortization $46,000($460,000/10) Balance at December 2025 $414,000 Conclusion:- Pharoah Company Intangible section of the balance sheet December 31,2025 Intangible assets:- Patents $ 12,24,000 Franchise $ 4,14,000 Total intangible assets $ 16,38,000 I hope helpful to you... If you are satisfied... Support me... Thank you...

Answered: Prepare a schedule showing the…

Business

Accounting

Prepare a schedule showing the intangibles section of Pharoah's balance sheet at December 31, 2025. (Enter acco and do not provide descriptive information!

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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