The following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $440,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business. Oriole spent $600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 2. In January, 2021, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $249,900. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. Oriole incurred $180,800 in successfully defending one of its patents in an infringement suit. The patent expires during 3. 4. December, 2024. Oriole incurred $470,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $241,920, is deemed worthless. 5. 6. Oriole paid Sneed Laboratories $98,800 for research and development work performed by Sneed under contract for Oriole. The benefits are expected to last six years.
The following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2020. 1. Minton paid Grand Company $440,000 for the exclusive right to market a particular product, using the Grand name and logo in promotional material. The franchise runs for as long as Oriole is in business. Oriole spent $600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its application will be successful. 2. In January, 2021, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were $249,900. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years. Oriole incurred $180,800 in successfully defending one of its patents in an infringement suit. The patent expires during 3. 4. December, 2024. Oriole incurred $470,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $241,920, is deemed worthless. 5. 6. Oriole paid Sneed Laboratories $98,800 for research and development work performed by Sneed under contract for Oriole. The benefits are expected to last six years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following transactions involving intangible assets of Oriole Corporation occurred on or near December 31, 2020.
1.
Minton paid Grand Company $440,000 for the exclusive right to market a particular product, using the Grand name and
logo in promotional material. The franchise runs for as long as Oriole is in business.
Oriole spent $600,000 developing a new manufacturing process. It has applied for a patent, and it believes that its
application will be successful.
2.
In January, 2021, Oriole's application for a patent (#2 above) was granted. Legal and registration costs incurred were
$249,900. The patent runs for 20 years. The manufacturing process will be useful to Minton for 10 years.
Oriole incurred $180,800 in successfully defending one of its patents in an infringement suit. The patent expires during
3.
4.
December, 2024.
Oriole incurred $470,400 in an unsuccessful patent defense. As a result of the adverse verdict, the patent, with a
remaining unamortized cost of $241,920, is deemed worthless.
Oriole paid Sneed Laboratories $98,800 for research and development work performed by Sneed under contract for
Oriole. The benefits are expected to last six years.
5.
6.
Transcribed Image Text:Prepare journal entry (ies) for on December 31, 2021 to record any resultant amortization. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account
titles and enter O for the amounts.)
No. Account Titles and Explanation
Debit
Credit
1.
2.
4.
6.
3.
5.
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