Question

3 Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $2,700. When purchased, the patent had an estimated life of 9 years as much as $150,000 because it has an indefinite life life to the company b. A trademark was registered with the federal government for $5,500. Management estimated that the trademark could be worth 10 points C. Computer licensing rights were purchased this year on January 1 for $50,000. The rights are expected to have a five-year useful Print Required 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the References current year. Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3A Req 3B Compute the acquisition cost of each intangible asset. Acquisition Cost Patent Trademark Licensing Rights Req1 Req 2 Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3A Req 3B Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.) Amortization Expenses Patent Trademark Licensing Rights Req 1 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Show how these assets and any related expenses should be reported on the income statement for the current year BLUESTONE COMPANY Income Statement (partial) For the year ending December 31 Req2 Req 3B> Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Show how these assets and any related expenses should be reported on the balance sheet for the current year. (Negative amounts should be indicated by a minus sign.) BLUESTONE COMPANY Balance sheet (partial) At December 31 Intangibles

Answer 1

Ans-Acquisition cost of intangible assets:

Particulars	Amount ($)
Patent	2,700
Trademark (historic cost)	5,500
Licencing	50,000

Computation of amortization expenses:-

Particulars	Amount ($)
Patent	(2,700/9) =300
Trademark(indefinite life)	0
Licencing	$50,000/5= 10,000

Partial Income Statement representing amortization expenses:-

Particulars	Amount ($)
General and administrative expenses:
Amortization of patents	300
Amortization of licencing rights	10,000

Partial Balance Sheet representing intangible assets:-

Particulars	Amount ($)
Non-current Assets
Intangible assets:-
Patent ($2,700-$300)	$2,400
Trademark	5,500
Licencing ($50,000-$10,000)	40,000