Question

Cullumber 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 (8-year life)		$354,400
4/1/20		Purchase goodwill (indefinite life)		353,000
7/1/20		Purchased franchise with 10-year life; expiration date 7/1/30		433,000
8/1/20		Payment of copyright (5-year life)		159,600
9/1/20		Research and development costs		223,000
				$1,523,000

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                                                                      CopyrightsResearch and development costsPatentsFranchisesGoodwill		$enter a dollar amount
select an intangible asset                                                                      CopyrightsGoodwillFranchisesResearch and development costsPatents		$enter a dollar amount
select an intangible asset                                                                      PatentsResearch and development costsFranchisesGoodwillCopyrights		$enter a dollar amount
select an intangible asset                                                                      GoodwillFranchisesPatentsCopyrightsResearch and development costs		$enter a dollar amount

Answer 1

a
Account Titles and Explanation	Debit	Credit
Patents	354400
Goodwill	353000
Franchise	433000
Copyright	159600
Research and Development Expenses	223000
Intangible Assets		1523000
b
Account Titles and Explanation	Debit	Credit
Amortization Expense	79250
Patents		44300	=354400/8
Franchise		21650	=433000/10*6/12
Copyright		13300	=159600/5*5/12
c
Patents	310100		=354400-44300
Goodwill	353000
Franchises	411350		=433000-21650
Copyrights	146300		=159600-13300