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On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year.

On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchas

On January 1, 2022, Pharoah Company had a balance of $395,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2022, the company had the following additional transactions. 

Jan. 2 Purchased a patent (7-year life) $351,750. 

July 1 Acquired a 10-year franchise; expiration date July 1, 2,032, $604,800. 

Sept. 1Research and development costs $177,000.  

(a) Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash. (Record entries in the order displayed in the problem statement. 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 0 for the amounts.) 


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Date Account Titles and Explanation Debit Credit
Jan 2 Patent 351,750
      Cash 351,750
July 1 Franchise 604,800
      Cash 604,800
Sept 1 Research and development expense 117,000
      Cash 117,000

ekkarill92 answered 2 years ago
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