chelle7906
Mar 26, 2009, 05:18 PM
I got the first part of this problem, but I'm struggling with the last few questions.
The intangible assets section of a company's balance sheet at December 31, 2010, is presented below:
Patent ($82,860 cost less $8,286 amortization): $74,574
Copyright ($49,716 cost less $34,801 amortization): 14,915
Total: $89,489
The patent was acquired in January 2010 and has a useful life of 10 years. The copyright was acquired in January 2004 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2011.
Jan. 2: Paid $62,145 legal costs to successfully defend the patent against infringement by another company.
Jan.-June: Developed a new product, incurring $290,010 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $27,620.
Sept. 1: Paid $55,240 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1: Acquired a copyright for $276,200. The copyright has a useful life of 50 years.
I got the journal entries to record the transactions correct...
Jan. 2:
Patents 62145
Cash 62145
Jan-June:
R&D expense 290010
Cash 290010
July 1:
Patents 27620
Cash 27620
Sept 1:
Ad. expense 55240
Cash 55240
Oct. 1:
Copyright 276200
Cash 276200
But I also have to prepare entries to record the 2011 amortization expenses
Dec. 31:
Amortization expense-patents ???
Patents ???
Dec. 31:
Amortization expense-copyright ???
Copyright ???
I got $15,766 --(74,574 + 62,145 / 9) + ((27,620 / 20) x (5/12))-- for patents and $16,353 --(14,915 / 3) + ((276,200 / 50) x (3/12))--for copyrights, but I have no idea if that's right.
And...how would I pull together all this info to prepare the intangible assets section of the balance sheet at Dec. 31, 2011? I know I'd list "Patent," "Copyright," and "Total Intangible Assets," but I'm not too sure which numbers to use.
Thanks in advance for any pointers!
The intangible assets section of a company's balance sheet at December 31, 2010, is presented below:
Patent ($82,860 cost less $8,286 amortization): $74,574
Copyright ($49,716 cost less $34,801 amortization): 14,915
Total: $89,489
The patent was acquired in January 2010 and has a useful life of 10 years. The copyright was acquired in January 2004 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2011.
Jan. 2: Paid $62,145 legal costs to successfully defend the patent against infringement by another company.
Jan.-June: Developed a new product, incurring $290,010 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $27,620.
Sept. 1: Paid $55,240 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1: Acquired a copyright for $276,200. The copyright has a useful life of 50 years.
I got the journal entries to record the transactions correct...
Jan. 2:
Patents 62145
Cash 62145
Jan-June:
R&D expense 290010
Cash 290010
July 1:
Patents 27620
Cash 27620
Sept 1:
Ad. expense 55240
Cash 55240
Oct. 1:
Copyright 276200
Cash 276200
But I also have to prepare entries to record the 2011 amortization expenses
Dec. 31:
Amortization expense-patents ???
Patents ???
Dec. 31:
Amortization expense-copyright ???
Copyright ???
I got $15,766 --(74,574 + 62,145 / 9) + ((27,620 / 20) x (5/12))-- for patents and $16,353 --(14,915 / 3) + ((276,200 / 50) x (3/12))--for copyrights, but I have no idea if that's right.
And...how would I pull together all this info to prepare the intangible assets section of the balance sheet at Dec. 31, 2011? I know I'd list "Patent," "Copyright," and "Total Intangible Assets," but I'm not too sure which numbers to use.
Thanks in advance for any pointers!