Question

Crane Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (9-year life) $387,900 4/1/20 Purchase goodwill (indefinite life) 341,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 421,000 8/1/20 Payment of copyright (5-year life) 145,200 9/1/20 Research and development costs 211,000 $1,506,100

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount

Reflect all balances accurately as of December 31, 2020. Use straight-line amortization select an intangible asset FranchisesCopyrightsResearch and development costsPatentsGoodwill $enter a dollar amount select an intangible asset Research and development costsGoodwillFranchisesCopyrightsPatents $enter a dollar amount select an intangible asset FranchisesResearch and development costsPatentsCopyrightsGoodwill $enter a dollar amount select an intangible asset CopyrightsFranchisesResearch and development costsPatentsGoodwill $enter a dollar amount

Answer 1

Account Titles and Explanation Debit Credit Answer $387,900 Patents Goodwill Franchises Copyrights Research and Development $341,000 $421,000 $145,200 $211,000 $1,506,100 Intangible Assets (To record the Intangible Assets) Account Titles and Explanation Debit Credit 2 Amortization Expense $76,250 ($387,900 /9 years) Franchises ($421,000 10 years x 6/12) Copyrights ($145,200 /5 years x 5/12) (To record the amortization of Intangible Assets) $43,100 Patents $21,050 $12,100 3 Reflect all balances accurately as of December 31, 2020 ($387,900- $43,100) Goodwill (No Amortization) Franchises ($421,000 - $21,050) Copyrights ($145,200 - $12,100) $344,800 Patents $341,000 $399,950 $133,100