The following information concerns the intangible assets of Epstein Corporation:

Question

The following information concerns the intangible assets of Epstein Corporation:
a. On June 30, 2016, Epstein completed the acquisition of the Johnstone Corporation for $2,420,000 in
cash. The fair value of the net identifiable assets of Johnstone was $2,050,000.
b. Included in the assets purchased from Johnstone was a patent that was valued at $91,200. The
remaining legal life of the patent was 13 years, but Epstein believes that the patent will only be useful for
another eight years.
c. Epstein acquired a franchise on October 1, 2016, by paying an initial franchise fee of $250,800. The
contractual life of the franchise is 11 years.
Required:
1. Prepare year­end adjusting journal entries to record amortization expense on the intangibles at
December 31, 2016. (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field.)
view transaction list view general journal
Transaction General Journal Debit Credit

2. Prepare the intangible asset section of the December 31, 2016, balance sheet. (Do not round
intermediate calculations.)

Balance Sheet

December 31, 2016
Intangible assets:
Goodwill
Patent
Franchise
Total intangibles

Explanation / Answer

1.

2.

Workings:

Journal Entries: Account titles Debit Credit Amortization Expenses           48,400           To goodwill           37,000           To Patent             5,700           To Frenchise             5,700 (For recording amortization expenses)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.