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    Intangible Assets

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    E1-23 Hootie and the Blow Fish, Inc., organized in 2002, has the following transactions related to intangible assets.
    1/2/02 Purchased patent (7-year life) $490,000
    4/1/02 Goodwill purchased (indefinite life) 360,000
    7/1/02 10-year franchise; expiration date 7/1/2012 420,000
    9/1/02 Research and development costs 185,000
    Instructions
    Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the entries as of December 31, 2002, recording any necessary amortization and reflecting all balances accurately as of that date.

    Patent
    490,000 / (7 years) = 70,000
    Jan. 02 Amortization Expense-Patents 70,000
    Patents 70,000
    (To record patent amortization)

    Goodwill
    April 02 Cash??? 360,000
    Goodwill purchased 360,000

    10-year franchise??

    Research and development costs?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:33 pm ad1c9bdddf
    https://brainmass.com/business/accounting/intangible-assets-64513

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    Solution Summary

    Intangible Assets are noted.

    $2.19

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