Question

Required information The following information applies to the questions displayed below) The following information relates to the intangible assets of University Testing Services (UTS) 0. On January 1, 2021, UTS completed the purchase of Heinrich Corporation for $2,847,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,550,000 a. Included in the assets purchased from Heinrich was a patent valued at $81,200. The original legal life of the patent was 20 years, there are 12 years remaining, but UTS believes the patent will be useful for only seven more years. b. UTS acquired a franchise on July 1, 2021, by paying an initial franchise fee of $309,600. The contractual life of the franchise is 9 years Required: 1. Record amortization expense for the intangible assets at December 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required in the first account field.) View transaction list

Answer 1

Transaction | Debit Credit General Journal No Entry Required b. $ 11,600 Amortization expense ($81,200/7) Patents (To record the amortization expense on patents) $ 11,600 C. 17,200 Amortization expense ($309,600/9*6/12) $ Franchises (To record the amortization expense on franchises) $ 17,200 UNIVERSITY TESTING SERVICES Balance Sheet December 31, 2021 (Intangible Assets section) Intangible assets Patents ($81,200-$11,600) Franchises ($309,600-$17,200) Goodwill Total Intangible Assets $ 69,600 $ 292,400 $ 297,000 $ 659,000