1 ) Prepare journal entries to record the transactions above . 2 ) Prepare journ
ID: 2526862 • Letter: 1
Question
1 ) Prepare journal entries to record the transactions above .
2 ) Prepare journal entries to record the 2017 amortization expense for intangible assets .
3 ) Prepare the intangible assets section of the statement of financial position at December 31, 2017 .
Question 1 The intangible assets section of Buffalo Company at December 31, 2016, is presented below. Patents (E67,600 cost less £6,760 amortization) Copyrights (£42,800 cost less £17,120 amortization) E60,840 25,680 E86,520 Total The patent was acquired in January 1, 2016 and has a useful life of 10 years. The copyright was acquired in January 1, 2013 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2017 Paid E43,290 legal costs to successfully defend the patent against infringement by another company. Developed a new product, incurring £133,340 in research costs and £147,100 in development costs prior to technological feasibility. A patent was granted for the product on July 1. Its useful life is equal to its legal life. Paid £121,500 to an X-Games star to appear in commercials advertising the company's products. The commercials will air in September and October. Acquired a copyright for E188,000. The copyright has a useful life of 40 years. Jan. 2 Jan.-June Sept. 1 Oct. 1Explanation / Answer
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Date General Journal Debit Credit Jan. 2 Patents 43290 Cash 43290 (To record legal costs to defend patent) Jan.-June Research and Development expenses 280440 Cash 280440 (To record research and development costs) Sept. 1 Advertising expense 121500 Cash 121500 (To record advertising costs paid) Oct. 1 Copyright 188000 Cash 188000 (To record acquisition of copyright)Related Questions
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