Question

On January 1, 2017, Cullumber Company had a balance of $359,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions.

Jan.	2		Purchased a patent (7-year life) $313,950.
July	1		Acquired a 8-year franchise; expiration date July 1, 2,025, $583,200.
Sept.	1		Research and development costs $176,500.

Make an entry as of December 31, 2017, recording any necessary amortization. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Amortization Expense 117750 Patents 44850 Franchise 72900 e Textbook and Media List of Accounts - Your answer is partially correct. Indicate what the intangible asset account balances should be on December 31, 2017. Patent $ 269100 Franchise $ 510300

Answer 1

1
	Debit	Credit
Amortization expense	81300
Patents		44850	=313950/7
Franchise		36450	=583200/8*6/12
2
Patent	269100		=313950-44850
Franchise	546750		=583200-36450
Note: Amortization on Franchise will be for 6 months (From July to December)