Question

View Policies Current Attempt in Progress On January 1, 2017, Sandhill Co. had a balance of $411,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prie year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions Jan. 2 Purchased a patent (7-year life) $307,650. July 1 Acquired a 9-year franchise: expiration date July 1, 2026, 5576,000. Sept. 1 Research and development costs $178,500. (a) and (b) (a) Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2017 transactions related to intangibles. All costs incurred were for cash. (b) Record any necessary amortization as of December 31, 2017 Of a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity placed particular Asset, Liability or Equity item that was reduced.) for parentheses) in front of the amount entered for the - Liabilities + Cash Patents Franchise Goodwill (a) Bal. $ Jan. 2 July 1 Sept. 1 (b) Dec 31 eTextbook and Media

Answer 1

1.

= Liabilities Retained earnings = Liabilities + Common stock + Revenue - Expense - Dividend Bal. Jan. 2 Jul. 1 Sept. 1 Cash -411,000 -307,650 -576,000 -178,500 Assets + patenet + Franchaise + Goodwill 411,000 307,650 576,000 178,500 Research & development expense

2.

Date	Account title and explanation	Debit	Credit
Dec. 31, 2017	Amortization expense	158,047.22
	Patent (307,650/7)		153,825.00
	Franchise (76,000/(9x2))		4,222.22