tps/ thtm rk E9-12 Computing and Reporting the Acquisition and Amortization of T
ID: 2391104 • Letter: T
Question
tps/ thtm rk E9-12 Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets LO 9-6) 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 $3,200. When purchased the patent had an estimated ife of 16 years. b A trademark was registered with the federal government for $7.500. Management estimated that the trademark could be worth as much as $190,000 because it has an indefinite life c Computer licensing rights were purchased this year on January 1 for $70,000. The rights are expected to have a five-year useful ife to the company 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 curent year Complete this question by entering your answers in the tabs below Rea 1 Req 2 Req 3A Req 38 Compute the acquisition cost of each intangible asset Licensing Rigts Req 2 Prey 4ors l Next >Explanation / Answer
1 AND 2 Acquisition cost AMORTIZATION EXPENSE=ACQUISITION COST/USEFUL LIFE PATENT $ 3,200 3200/16 $ 200 TRADEMARK $ 7,500 INDEFINITE LIFE ,HENCE, NA LICENSING RIGHTS $ 70,000 70000/5 $ 14,000 3 BLUESTONE COMPANY INCOME STATEMENT(PARTIAL) FOR THE YEAR ENDING DECEMBER 31 AMORTIZATION EXPENSE $ 14,200 BLUESTONE COMPANY BALANCE SHEET (PARTIAL) AS AT DECEMBER 31 INTANGIBLES: PATENT $ 3,200 TRADEMARK $ 7,500 LICENSING RIGHTS $ 70,000 ACCUMULATED AMORTIZATION $ (14,200)
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