Collins Ltd. has these transactions related to intangible assets and goodwill in 2015, its fi rst year

Question:

Collins Ltd. has these transactions related to and in 2015, its fi rst year of operations:
Jan. 2 Purchased a patent with an estimated useful life of five years and a legal life of 20 years for $40,000.
Apr. 1 Acquired another company and recorded of $300,000 as part of the purchase.
July 1 Acquired a franchise for $250,000. The franchise agreement is renewable and not expected to expire.
Sept. 1 Incurred research costs of $150,000.
30 Incurred development costs of $50,000. A marketable product has been identified and production will commence in the near future.
Dec. 31 Recorded annual amortization.
31 Tested the for impairment. Recoverable amounts exceeded carrying amounts in all cases. Also tested and determined that it had a recoverable amount of $270,000.
Instructions
(a) Prepare the entries to record the above transactions. Assume all costs incurred during January through September were incurred for cash.
(b) Show the presentation of the and on the statement of fi nancial position at December 31.
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