Question

analysi Instructions Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years. E12-6 (L01,2,5) EXCEL (Recording and Amortization of Intangibles) Marshall Company, organized in 2016, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2017 e, stud equit 1/2/17 4/1/17 7/1/17 8/1/17 9/1/17 Purchased patent (8-year life) Purchase goodwill indefinite life) Purchased franchise with 10-year life; expiration date 7/1/27 Payment of copyright (5-year life) Research and development costs $ 350,000 360,000 4 50,000 156,000 215.000 $1,531,000 tion ting fc ancial -). W Instructions Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intan gibles. Make the entries as of December 31, 2017, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)

Answer 1

Solution Event Journal Entries Account Title and Explanation patents Goodwill Franchise Copyright Research and Development expense Intangeble Assets Debit 2$) Credit (5) $ 350,000 $360,000 $450,000 $ 156,000 $215,000. $1,531,000 2. $79,250 Amortizeition Expense patents Franchise Copyright $43,750 $ 22,500 $ 13,000

calculation of Amortization Expense! D Patents : $350,00018 => $43,750 2) Franchise $450,000 6 => $22,500 .. . 10 3) copyrights = $156,600 x => $13,000 . Balance of Intangeble Assets as of December 31, 2017 patents. ($350,000-$43,750) $ 306,250 Good will $360,000 Franchise (su50.000-$22,500) $427,500 Copyright ($ 156,000-$13,000). § 143,000

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