Question
In: Accounting
The intangible assets section of Larkspur, Inc. at December 31, 2020, is presented below. Patents ($72,000...
The intangible assets section of Larkspur, Inc. at December 31,
2020, is presented below.
| Patents ($72,000 cost less $7,200 amortization) | $64,800 | |
| Franchises ($48,000 cost less $19,200 amortization) | 28,800 | |
| Total | $93,600 |
The patent was acquired in January 2020 and has a useful life of 10
years. The franchise was acquired in January 2017 and also has a
useful life of 10 years. The following cash transactions may have
affected intangible assets during 2021.
| Jan. 2 | Paid $22,500 legal costs to successfully defend the patent against infringement by another company. | |
| Jan.–June | Developed a new product, incurring $131,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | |
| Sept. 1 | Paid $46,000 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October. | |
| Oct. 1 | Acquired a franchise for $124,000. The franchise has a useful
life of 50 years. |
Instructions
Prepare journal entries to record the transactions above.
Prepare journal entries to record the 2021 amortization expense.
Prepare the intangible assets section of the balance sheet at December 31, 2021.
Solutions
Expert Solution
Prepare journal entries to record the transactions above.
|
Date |
Description |
Debit $ |
Credit $ |
|
2-Jan |
Legal Fees: Patent |
22500 |
|
|
Cash |
22500 |
||
|
Jan.–June |
Research &Development |
131000 |
|
|
Cash |
131000 |
||
|
Sept.1 |
Advertising Expense |
46000 |
|
|
Cash |
46000 |
||
|
Oct. 1 |
Franchise |
124000 |
|
|
Cash |
124000 |
______________________________________________________________________
Prepare journal entries to record the 2021 amortization expense.
|
Date |
Description |
Debit $ |
Credit $ |
|
31-Dec |
Amortization Expense: Patents |
9700 |
|
|
Accumulated Amortization: Patents |
9700 |
||
|
(72000/10=7200 |
|||
|
31-Dec |
Amortization Expense: Copyrights |
5420 |
|
|
Accumulated Amortization: Copyrights |
5420 |
||
|
($48,000 X 1/10) +($124,000 X 1/50 X 3/12) |
_____________________________________________________________________
Prepare the intangible assets section of the balance sheet at December 31, 2021
|
Assets |
|
|
Intangible Assets |
|
|
Patents ($94500 cost – $16,900 amortization) |
77600 |
|
Franchise ($172,000 cost – $24,620 amortization) |
147380 |
|
Total intangible assets |
224980 |
Working notes for the above answer is as under
(1)
Patent
Cost ($72,000 + $22,500)=94500
amortization on patent ($7,200+9700)=16900
(2)
Copyrights
Cost ($48,000 + $124,000)=172,000
amortization on patent ($19200+5420)=24620
ekkarill92 answered 2 years agoRelated Solutions
The intangible assets section of Sappelt Company at December 31, 2017, is presented below.
The intangible assets section of Sappelt Company at December 31, 2017, is presented below.
Patents ($70,000 cost less $7,000 amortization)......................................$63,000
Franchises ($48,000 cost less $19,200 amortization)................................28,800
Total...........................................................................................................................$91,800
The patent was acquired in January 2017 and has a useful life of 10 years. The franchise was acquired in January 2014 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018.
Jan. 2 Paid $27,000 legal costs to successfully defend the patent...
The intangible assets section of Pronghorn Corporation’s balance sheet at December 31, 2022, is presented here....
The intangible assets section of Pronghorn Corporation’s balance
sheet at December 31, 2022, is presented here.
Patents ($83,100 cost less $7,400 amortization)
$75,700
Copyrights ($37,000 cost less $23,100 amortization)
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Total
$89,600
The patent was acquired in January 2022 and has a useful life of 10
years. The copyright was acquired in January 2016 and also has a
useful life of 10 years. The following cash transactions may have
affected intangible assets during 2023.
Jan.
2
Paid $63,000 legal costs...
Presented below are the amounts of assets and liabilities of BPA, Inc. as of December 31,...
Presented below are the amounts of
assets and liabilities of BPA, Inc. as of December 31, 2017, and
revenues and expenses of the company for the year ended on that
date.
Sales
$ 18,000,000
Cost of Goods Sold
$ 13,500,000
Wages Expense
$ 2,700,000
Common Stock
$ 2,250,000
Cash
$ 2,059,650
Building
$ 1,350,000
Mortgage Payable - Long Term
$ 1,012,500
Notes Payable - Long Term
$
675,000
Marketing Expense
$
607,500
Accounts Receivable
$
517,500
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$
450,000
Accounts...
Question 3 Intangible Assets XYZ Ltd reports the following intangible assets on 30 June 2020: Patents...
Question 3 Intangible
Assets
XYZ Ltd reports the following
intangible assets on 30 June 2020:
Patents at directors’ valuation
$160 000
Less Accumulated amortisation
(40 000)
Brand name at fair value
100 000
Licence at cost
$100 000
Less Accumulated amortisation
(10 000)
Additional Information:
Patents were acquired at a cost of $80 000 on 1 July 2016. They
have an estimated life of 16 years, of which 12 years remain on 30
June 2020.
The brand name is stated...
Presented below is the stockholders' equity section of Concord Corporation at December 31, 2020: Common stock,...
Presented below is the stockholders' equity section of Concord
Corporation at December 31, 2020:
Common stock, par value
$20; authorized 75,000 shares;
issued and outstanding 45600
shares
$ 912000
Paid-in capital in
excess of par value
351000
Retained earnings
498000
$1761000
During 2021, the following transactions occurred relating to
stockholders' equity:
3200 shares were reacquired at $29 per share.
3500 shares were reacquired at $34 per share.
1700 shares of treasury stock were sold at $31 per share.
For the...
The intangible assets section of Salmiento Corporation’s balance sheet at Decem- ber 31, 2010, is presented...
The intangible assets section of Salmiento
Corporation’s balance sheet at Decem-
ber 31, 2010, is presented here.
Patents ($60,000 cost less $6,000 amortization) $54,000
Copyrights ($36,000 cost less $25,200 amortization) 10,800
Total $64,800
The patent was acquired in January 2010 and has a useful life of 10
years. The copyright
was acquired in January 2004 and also has a useful life of 10
years. The following cash
transactions may have affected intangible assets during 2011.
Jan. 2 Paid $45,000 legal...
Presented below is the balance sheet for HHD, Inc., at December 31, 2018. Current assets $...
Presented below is the balance sheet for HHD, Inc., at December
31, 2018.
Current assets
$
656,000
Investments
542,000
Property, plant, and
equipment
2,392,000
Intangible assets
228,000
Total assets
$
3,818,000
Current liabilities
$
456,000
Long-term liabilities
722,000
Shareholders' equity
2,640,000
Total liabilities and
shareholders' equity
$
3,818,000
The captions shown in the summarized statement above include the
following:
Current assets: cash, $164,000; accounts receivable, $214,000;
inventories, $239,000; and prepaid insurance, $39,000.
Investments: investments in common stock, short term, $104,000,...
Presented below is the balance sheet for HHD, Inc., at December 31, 2018. Current assets $...
Presented below is the balance sheet for HHD, Inc., at December
31, 2018.
Current assets
$
656,000
Investments
542,000
Property, plant, and
equipment
2,392,000
Intangible assets
228,000
Total assets
$
3,818,000
Current liabilities
$
456,000
Long-term liabilities
722,000
Shareholders' equity
2,640,000
Total liabilities and
shareholders' equity
$
3,818,000
The captions shown in the summarized statement above include the
following:
Current assets: cash, $164,000; accounts receivable, $214,000;
inventories, $239,000; and prepaid insurance, $39,000.
Investments: investments in common stock, short term, $104,000,...
A comparative balance sheet for Crane Corporation is presented below. December 31 Assets 2020 2019 Cash...
A comparative balance sheet for Crane Corporation is presented
below.
December
31
Assets
2020
2019
Cash
$70720
$22880
Accounts receivable
85280
68640
Inventory
176800
196560
Land
73840
114400
Equipment
291200
208000
Accumulated depreciation–equipment
(76960)
(43680)
Total
$620880
$566800
Liabilities and Stockholders’ Equity
Accounts payable
$35360
$48880
Bonds payable
156000
208000
Common stock ($1 par)
170560
170560
Retained earnings
258960
139360
Total
$620880
$566800
Additional information:
1.
Net income for 2020 was $161200; there were no gains or
losses.
2.
Cash...
Presented below is the adjusted trial balance of Larkspur Corporation at December 31, 2017. Debit Credit...
Presented below is the adjusted trial balance of Larkspur
Corporation at December 31, 2017.
Debit
Credit
Cash
$ ?
Supplies
1,300
Prepaid Insurance
1,100
Equipment
48,100
Accumulated Depreciation-Equipment
$ 4,100
Trademarks
1,050
Accounts Payable
10,100
Salaries and Wages Payable
600
Unearned Service Revenue
2,100
Bonds Payable (due 2024)
9,100
Common Stock
10,100
Retained Earnings
25,100
Service Revenue
10,100
Salaries and Wages Expense
9,100
Insurance Expense
1,500
Rent Expense
1,300
Interest Expense
1,000
Total
$ ?
$ ?
Additional information:
1.
Net loss for the...
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