Question

O Ever r -12 ary 1, 2017, 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 Ouring 2017, the company had the following additional transactions 2 A Purchased a patent year lie) .351,750 d a 10 year tranchise expiration date July 1, 2027, 5104,800 Research and development costs $177,000 Sept 1 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 titles are automatically indented when the amount is entered. De metindent manually. If no entry is required select "No Entry for the accounties and enter for Date Accountities and Explanation Debit Credit VIDEO APRESS VIDEO SIMILAR EXERCISE

Answer 1

(a) -- Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash.

Answer -

Date	Account Titles and Explanation	Debit ($)	Credit​​​​​​​ ($)
Jan. 2, 2017	Patents Cash	351750 -	- 351750
July 1, 2017	Franchise Cash	604800 -	- 604800
Sept. 1, 2017	Research and development expenses Cash	177000 -	- 177000

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(b) -- Make an entry as of December 31, 2017, recording any necessary amortization.

Answer -

Account Titles and Explanation	Debit ($)	Credit​​​​​​​​​​​​​​​​​​​​​ ($)
Amortization expense Patents [$351750 / 7 years] Franchise [($604800 / 10 years) * 6/12]	80490 - -	- 50250 30240

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(c) - Indicate what the Intangible asset account balances should be on December 31, 2017

Answer -

Intangible asset	Calculations	Account balance as on December 31, 2017
Patents	[$351750 - $50250]	$301500
Franchise	[$604800 - $30240]	$574560