Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automati
Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automati
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Exercise 12-06
Pharoah Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.
1/2/20
Purchased patent (7-year life)
$304,500
4/1/20
Purchase goodwill (indefinite life)
345,000
7/1/20
Purchased franchise with 10-year life; expiration date 7/1/30
425,000
8/1/20
9/1/20
Payment of copyright (5-year life)
150,000
Research and development costs
215,000
$1,439,500
Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bd1c1ef-db64-4dda-a51a-6baac1ef08af%2Ff4d395c1-7bca-4267-85d4-5ecd6e19c78e%2Fg4fxkwy_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 12-06
Pharoah Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.
1/2/20
Purchased patent (7-year life)
$304,500
4/1/20
Purchase goodwill (indefinite life)
345,000
7/1/20
Purchased franchise with 10-year life; expiration date 7/1/30
425,000
8/1/20
9/1/20
Payment of copyright (5-year life)
150,000
Research and development costs
215,000
$1,439,500
Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
![Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
LINK TO ΤΕXΤ
LINK TO TEXT
LINK TO TEXT
Reflect all balances accurately as of December 31, 2020.
Use straight-line amortization
$1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0bd1c1ef-db64-4dda-a51a-6baac1ef08af%2Ff4d395c1-7bca-4267-85d4-5ecd6e19c78e%2F2cg94g_processed.png&w=3840&q=75)
Transcribed Image Text:Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
SHOW LIST OF ACCOUNTS
LINK TO ΤΕXΤ
LINK TO TEXT
LINK TO TEXT
Reflect all balances accurately as of December 31, 2020.
Use straight-line amortization
$1
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