haroah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then: Jan. 2 Purchased patent (8-year life) $338,000 Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000 Apr. 1 Purchased goodwill (indefinite life) 307,000 July 1 Purchased franchise with 10-year life; expiration date July 1, 2030 259,000 1 Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 33,000 Aug. 1 Payment for copyright (5-year life) 142,800 1 Purchased trademark (3-year life) 14,400 1 Purchased customer list (2-year life) 9,600 Sept. 1 Research costs
haroah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then: Jan. 2 Purchased patent (8-year life) $338,000 Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000 Apr. 1 Purchased goodwill (indefinite life) 307,000 July 1 Purchased franchise with 10-year life; expiration date July 1, 2030 259,000 1 Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 33,000 Aug. 1 Payment for copyright (5-year life) 142,800 1 Purchased trademark (3-year life) 14,400 1 Purchased customer list (2-year life) 9,600 Sept. 1 Research costs
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 64E
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Pharoah Limited organized late in 2019 and set up a single account for all intangible assets. The following summary shows the entries in 2020 (all debits) that have been recorded in Intangible Assets since then:
| Jan. | 2 | Purchased patent (8-year life) | $338,000 | ||
| Mar. | 31 | Costs to search for new ways to apply patent that was purchased on Jan. 2 | 21,000 | ||
| Apr. | 1 | Purchased |
307,000 | ||
| July | 1 | Purchased franchise with 10-year life; expiration date July 1, 2030 | 259,000 | ||
| 1 | Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 | 33,000 | |||
| Aug. | 1 | Payment for copyright (5-year life) | 142,800 | ||
| 1 | Purchased trademark (3-year life) | 14,400 | |||
| 1 | Purchased customer list (2-year life) | 9,600 | |||
| Sept. | 1 | Research costs | 236,000 | ||
| $1,360,800 |
Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.
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