Question

Problem 9-10A a-c (Part Level Submission) The intangible assets and goodwill reported by Pharoah Corporation at December 31, 2017, follow: Copyrights LEss: Accumulated amortizat ion $32,700 16,350 16,350 Trademarks 49.800 Goodwill 126,870 Total $193,020 A capyright (#1) was acquired on January 1, 2016, and has a uscful life of four years. The trademarks were acquired on January 1, 2014, and are expacted to have an indefinite life. The company has a Decoember 31 year end and prepares adjusting fournal entries annually The fallowing cash transactions may have affected intangible assets and goodwill during 2018: 5 Paid $7,020 in legal costs to successfully defend the trademarks against infringemant by another company. 1 Davelopcd a new product, inouming $189,440 in research and $50,20D in devclopment costs with prabable future benefits. The praduct is expected to have a useful life of 20 ycars 1 Paid $58,200 to a popular hockey player to apprar in coammercials advertising the company's praducts. The commercials will air in carly September. 1 Acquired another copyright (#2 ) for $ 187,280. The new copyright has a useful life of four years 31 Determined the recoverable amount of the goadwill to be SB5,280. There was na indication that the copyrights or trademarks were impaired. Jan July Sept Dct. Dec (a) Prepare journal entries to record the transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. IT no entry is required, select "No Enttry" for the account titles and enter 0 for the amounts Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record research expense) To reod dvelapment costs)

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Answer 1

(a)	Date	Account titles and explanation					Debit	Credit
	Jan 5.	Trademarks					7020
		Cash						7020
		(Legal costs to successfully defend the trademarks)
	July 1.	Research expenses					189440
		Cash						189440
		(To record research expense)
	July 1.	Development costs					50200
		Cash						50200
		(To record development costs)
	Sept 1.	Advertising expense					58200
		Cash						58200
		(Advertising expenses paid to a hockey player)
	Oct 1.	Copyrights					187280
		Cash						187280
		(Acquired a copyright)
	Dec 31.	Impairment loss				(Note:1)	41590
		Goodwill						41590
		(To record impairment loss )
	Note:1
	Impairment loss:
					$
	Book value of goodwill				126870
	Less:recoverable amount				85280
	Impairment loss				41590