Kreiser Company had three intangible assets at the end of 2017 (end of the accounting year): a.

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Kreiser Company had three intangible assets at the end of 2017 (end of the accounting year): 

a. A patent was purchased from J. Miller on January 1, 2017, for a cash cost of $5,640. When purchased, the patent had an estimated life of fifteen years. 

b. A trademark was registered with the federal government for $10,000. Management estimated that the trademark could be worth as much as $200,000 because it has an indefinite life. 

c. On January 1, 2017, computer licensing rights were purchased for $60,000. The rights are expected to have a four-year useful life to the company. 


Required: 

1. Compute the acquisition cost of each intangible asset. 

2. Compute the amortization of each intangible for the year ended December 31, 2017. 

3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2017.

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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Fundamentals of Financial Accounting

ISBN: 978-1259269868

5th Canadian edition

Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh

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