Question

End of Chapter Exercise 8.9

Wilkins Ltd, incorporated in 2015, has these transactions related to intangible assets in that year:

Jan. 1		Purchased patent (10-year life), $455,840.
July 1		Acquired an existing 6-year franchise; expiration date 1 July 2021, $316,800.
Sept. 1		Research and development costs, $148,400.

Required

Prepare the necessary entries to record these transactions. All costs incurred were for cash and included GST of 10%. Make the entries for 31 December 2015, the end of Wilkins Ltd’s financial year, recording any necessary amortisation and indicating what the balances should be on 31 December 2015.

Wilkins Ltd General journal Debit $ Account and explanation Credit $ Date 1/1/15 1/7/15 1/9/15 31/12/15

Answer 1

101 Date Particulars Amount (or) Amonnt (ro) Dy 4404400 41440 Patent al Input last ak by To cash (Being Parent purchased) 45-5840 17/05 288,000 28800 LIST alc Franchise al by Input by To cash (Being franchise aquized). 316,000 119165 134910 Research and development expense al Input ust al TOY 13490 148401 To cash 55840 Taschen oy 31/12/16 4 mot qisation all To patent 40440 14400 To praksa. Sanchise (Being Amoxtaisation? * Assumed ast Amount included in the Amouot Closing balance of g Patent = 444 414400-41440 372960 28 8,000 14400 Closing balance of Zanchise 273600