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(a)
CULLUMBER COMPANY | |
Intangibles Section of Balance Sheet | |
December 31, 2020 | |
Intangible Assets: | |
Patents | 1296000 |
Franchise | 459000 |
Total intangible assets $ | 1755000 |
Working:
1 | Purchase cost of patent | 1800000 |
Less: Amortization for 2019 ($1800000/10) | 180000 | |
1620000 | ||
Less: Amortization for 2020 ($1620000/5) | 324000 | |
Balance in Patent, Dec. 31, 2020 | 1296000 | |
2 | Purchase cost of franchise | 510000 |
Less: Amortization for 2020 ($510000/10) | 51000 | |
Balance in Franchise, Dec. 31, 2020 | 459000 |
(b)
CULLUMBER COMPANY | ||
Income Statement Effect | ||
For the Year Ended December 31, 2020 | ||
Patent from Marin Company: | ||
Amortization of patent | 324000 | |
Franchise from Bramble Company: | ||
Amortization of franchise | 51000 | |
Payment to Bramble (5% x $2530000) | 126500 | |
177500 | ||
Research and development costs | 460000 | |
Total charged against income $ | 961500 |
Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Marin...
Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Marin Company for $1,800,000 on January 1, 2019. Cullumber estimated the remaining useful life of the patent to be 10 years. The patent was carried in Marin’s accounting records at a net book value of $1,800,000 when Marin sold it to Cullumber. During 2020, a franchise was purchased from Bramble Company for $510,000. In addition, 5% of revenue from the franchise must be paid to...
Exercise 12-8 Cullumber Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,358,000 on January 1, 2016. Cullumber estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford’s accounting records at a net book value of $1,919,000 when Ford sold it to Cullumber. During 2017, a franchise was purchased from Polo Company for $579,000. In addition, 4% of revenue from the franchise must be...
Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1,600,000 on January 1, 2019. Sandhill estimated the remaining useful life of the patent to be 10 years. The patent was carried in Teal Mountain’s accounting records at a net book value of $1,600,000 when Teal Mountain sold it to Sandhill. During 2020, a franchise was purchased from Indigo Company for $450,000. In addition, 5% of revenue from the franchise must...
Sandhill Company has provided information on intangible assets as follows. A patent was purchased from Teal Mountain Company for $1,750,000 on January 1, 2019. Sandhill estimated the remaining useful life of the patent to be 10 years. The patent was carried in Teal Mountain's accounting records at a net book value of $1,750,000 when Teal Mountain sold it to Sandhill. During 2020, a franchise was purchased from Monty Company for $450,000. In addition, 5% of revenue from the franchise must...
Carla Vista Company has provided information on intangible assets as follows. A patent was purchased from Tamarisk Company for $1,650,000 on January 1, 2019. Carla Vista estimated the remaining useful life of the patent to be 10 years. The patent was carried in Tamarisk’s accounting records at a net book value of $1,650,000 when Tamarisk sold it to Carla Vista. During 2020, a franchise was purchased from Flint Company for $500,000. In addition, 5% of revenue from the franchise must...
Crane Company has provided information on intangible assets as follows. A patent was purchased from Ford Company for $2,330,000 on January 1, 2016. Crane estimated the remaining useful life of the patent to be 10 years. The patent was carried in Ford's accounting records at a net book value of $2,053,000 when Ford sold it to Crane. During 2017, a franchise was purchased from Polo Company for $513,000. In addition, 4% of revenue from the franchise must be paid to...
The intangible assets section of Oriole Company at December 31, 2019, is presented below. Patents ($62,000 cost less $6,200 amortization) $55,800 Franchises ($43,000 cost less $17,200 amortization) 25,800 Total $81,600 The patent was acquired in January 2019 and has a useful life of 10 years. The franchise was acquired in January 2016 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2020. Jan. 2 Paid $18,000 legal costs to successfully...
Pharoah Company has provided information on intangible assets as follows. A patent was purchased from Shamrock Company for $1,600,000 on January 1, 2019. Pharoah estimated the remaining useful life of the patent to be 10 years. The patent was carried in Shamrock's accounting records at a net book value of $1,600,000 when Shamrock sold it to Pharoah. During 2020, a franchise was purchased from Sheffield Company for $490,000. In addition, 5% of revenue from the franchise must be paid to...
Crane Company has provided information on intangible assets as follows. A patent was purchased from Larkspur Company for $1,650,000 on January 1, 2019. Crane estimated the remaining useful life of the patent to be 10 years. The patent was carried in Larkspur’s accounting records at a net book value of $1,650,000 when Larkspur sold it to Crane. During 2020, a franchise was purchased from Pronghorn Company for $480,000. In addition, 5% of revenue from the franchise must be paid to...
Carla Vista Company has provided information on intangible assets as follows. A patent was purchased from Tamarisk Company for $1,650,000 on January 1, 2019. Carla Vista estimated the remaining useful life of the patent to be 10 years. The patent was carried in Tamarisk’s accounting records at a net book value of $1,650,000 when Tamarisk sold it to Carla Vista. During 2020, a franchise was purchased from Flint Company for $500,000. In addition, 5% of revenue from the franchise must...