Question

Sandhill Ltd. has these transactions related to intangible assets and goodwill in 2018, its first year of operations: Jan. 2 Purchased a patent with an estimated useful life of five years for $40,280. The company that sold the patent to Collins registered the patent 10 years ago. Apr.1 Acquired another company and recorded goodwill of $320,700 as part of the purchase. July 1 Acquired a franchise for $234,000. The franchise agreement is renewable without charge and not expected to expire. Sept. 1 Incurred research costs of $142,000. 30 Incurred development costs of 548,400. A marketable product has been identified and resources have been secured so that production will start next year. Dec. 31 Recorded annual amortization. 31 Tested the intangible assets for impairment. Recoverable amounts exceeded carrying amounts for all intangible assets. Also tested goodwill and determined that it had a recoverable amount of $287,320. *(a) Prepare the entries to record the above transactions. Assume all costs incurred during January through September were incurred for cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record amortization expense)

Answer 1

Date Accounts Tiller & Caplanation Debil | Creded - Jan. a Patents $ 40,280 - cash $ 40,280 April. Goodwill $320,700 1. Cash $ 320 7700 Julys Franchises ,234.000 - Cash $ 234,000 Sept. 1 Research expenses $142000 - Cash $ 142,0001 Sept. 30 Development Costa $ 48400 - Cash $ 45400 Dec.32 Amordiacelion expense F 8056 Accumulated owelization Scrapecond amortization there -- $ 8056 Dec.31 Impairement loss & 3 3380 L. Goodewall: $33380 Explanations :v to fecond graduall impairmend) * Dec. 28 : Amoebrzalioneapensce= (940.700) - 6056 * Dee. 31: Impairement loss ($320,700 – $ 287,320) ' . - $ 33380