Springer Company had three intangible assets at the end of 2020 (end of the accounting year): A

Question:

Springer Company had three intangible assets at the end of 2020 (end of the accounting year):

A copyright purchased on January 1, 2020, for a cash cost of $14,500. The copyright is expected to have a 10-year useful life to Springer. Goodwill of $65,000 from the purchase of the Hartford Company on July 1, 2019.

A patent purchased on January 1, 2019, for $48,000. The inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2015. Springer intends to use the patent for its remaining life.

Required:

1. Compute the amortization of each intangible at December 31, 2020. The company does not use contra-accounts.

2. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2020. (Assume there has been no impairment of goodwill.)

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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