1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK Ltd. for an initial franchise fee of $150,000. Of this amount, $30,000 was paid when the agreement was signed, and the balance is payable in 6 annual payments of$20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 6 annual payments discounted at 12%(the implicit rate for a loan of this type) is $82,228. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Cao’s revenue from the franchise for 2020 was $600,000. Cao estimates the useful life of the franchise to be 12 years. (Hint: You may want to refer to Appendix 18A to determine the proper accounting treatment for the franchise fee and payments.)
2. Cao incurred $115,000 of experimental and development costs in its laboratory to develop a patent that was granted on July 1, 2020. Legal fees and other costs during 2020 associated with registration of the patent totaled $27,000. Expenditures for successful litigation in defense of the patent totaling $8,700 were paid on November 1, 2020. Cao estimates that the useful life of the patent will be 10 years.
3. A trademark was purchased from Jian Company for $24,000 on January 1, 2017. Cao estimates that the useful life of the trademark will be 20 years from the date of acquisition
REQUIRED
| What is the amount for total intangibles, net of amortization at December 31, 2020? |
Homework Answers
The assets will be shown in the balance sheet at the cost after deducting the amortization of the current year. The cost of the assets amortized will be as given under:
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1. On January 1, 2020, Cao signed an agreement to operate as a
franchisee of ATK...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK Ltd. for an initial franchise fee of $150,000. of this amount, $30,000 was paid when the agreement was signed, and the balance is payable in 6 annual payments of$20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 6 annual...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK Ltd. for an initial franchise fee of $150,000. Of this amount, $30,000 was paid when the agreement was signed, and the balance is payable in 6 annual payments of$20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 6 annual...
1. On January 1, 2017, Bridgeport signed an agreement to operate as a franchisee of Hsian Copy Se...
1. On January 1, 2017, Bridgeport signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. of this amount, S10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of S10,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2017 of the...
information concerning Martinez Corporation’s intangible assets is as follows 1.On January 1, 2020, Martinez signed an...
information concerning Martinez Corporation’s intangible assets
is as follows
1.On January 1, 2020, Martinez signed an agreement to operate as
a franchisee of Hsian Copy Service, Inc. for an initial franchise
fee of $77,500. Of this amount, $15,500 was paid when the agreement
was signed, and the balance is payable in 4 annual payments of
$15,500 each, beginning January 1, 2021. The agreement provides
that the down payment is not refundable and no future services are
required of the franchisor....
Information concerning Sheffield Corporation's intangible assets is as follows. 1. On January 1, 2020, Sheffield signed...
Information concerning Sheffield Corporation's intangible assets is as follows. 1. On January 1, 2020, Sheffield signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the...
can you please answer the questions that were not correct, please. Problem 12-3 Information concerning Pina Corporation's intangible assets is as follows. 1. On January 1, 2017, Pina signed an agr...
can
you please answer the questions that were not correct, please.
Problem 12-3 Information concerning Pina Corporation's intangible assets is as follows. 1. On January 1, 2017, Pina signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. Of this amount, $10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $10,000 each, beginning January 1, 2018. The agreement provides that the...
Information concerning Grouper Corporation’s intangible assets is as follows. 1. On January 1, 2020, Grouper signed...
Information concerning Grouper Corporation’s intangible assets is as follows. 1. On January 1, 2020, Grouper signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $72,500. Of this amount, $14,500 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $14,500 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the...
Problem 12-3 (Part Level Submission) Information concerning Bridgeport Corporation’s intangible assets is as follows. 1. On...
Problem 12-3 (Part Level Submission) Information concerning Bridgeport Corporation’s intangible assets is as follows. 1. On January 1, 2017, Bridgeport signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. Of this amount, $10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $10,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future...
Question 9 of 9 -/ 15 View Policies Current Attempt in Progress Information concerning Ayayai Corporation's...
Question 9 of 9 -/ 15 View Policies Current Attempt in Progress Information concerning Ayayai Corporation's intangible assets is as follows. 1. On January 1, 2020, Ayayai signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down...
On January 1, 2020, Lesley Benjamin signed an agreement, covering 5 years, to operate as a...
On January 1, 2020, Lesley Benjamin signed an agreement,
covering 5 years, to operate as a franchisee of Pronghorn Inc. for
an initial franchise fee of $46,000. The amount of $9,000 was paid
when the agreement was signed, and the balance is payable in five
annual payments of $7,400 each, beginning January 1, 2021. The
agreement provides that the down payment is nonrefundable and that
no future services are required of the franchisor once the
franchise commences operations on April...
1. On January 1, 2020, Cao signed an agreement to operate as a franchisee of ATK Ltd. for an initial franchise fee of $150,000. of this amount, $30,000 was paid when the agreement was signed, and the balance is payable in 6 annual payments of$20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 6 annual...
1. On January 1, 2017, Bridgeport signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. of this amount, S10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of S10,000 each, beginning January 1, 2018. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2017 of the...
information concerning Martinez Corporation’s intangible assets
is as follows
1.On January 1, 2020, Martinez signed an agreement to operate as
a franchisee of Hsian Copy Service, Inc. for an initial franchise
fee of $77,500. Of this amount, $15,500 was paid when the agreement
was signed, and the balance is payable in 4 annual payments of
$15,500 each, beginning January 1, 2021. The agreement provides
that the down payment is not refundable and no future services are
required of the franchisor....
Information concerning Sheffield Corporation's intangible assets is as follows. 1. On January 1, 2020, Sheffield signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the...
can
you please answer the questions that were not correct, please.
Problem 12-3 Information concerning Pina Corporation's intangible assets is as follows. 1. On January 1, 2017, Pina signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. Of this amount, $10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $10,000 each, beginning January 1, 2018. The agreement provides that the...
Question 9 of 9 -/ 15 View Policies Current Attempt in Progress Information concerning Ayayai Corporation's intangible assets is as follows. 1. On January 1, 2020, Ayayai signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down...
On January 1, 2020, Lesley Benjamin signed an agreement,
covering 5 years, to operate as a franchisee of Pronghorn Inc. for
an initial franchise fee of $46,000. The amount of $9,000 was paid
when the agreement was signed, and the balance is payable in five
annual payments of $7,400 each, beginning January 1, 2021. The
agreement provides that the down payment is nonrefundable and that
no future services are required of the franchisor once the
franchise commences operations on April...
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