Question
Blossom Company has provided information on intangible assets as follows. A patent was purchased from Kingbird Company for $1,750,000 on January 1, 2019. Blossom estimated
Blossom Company has provided information on intangible assets as follows. A patent was purchased from Kingbird Company for $1,750,000 on January 1, 2019. Blossom estimated the remaining useful life of the patent to be 10 years. The patent was carried in Kingbirds accounting records at a net book value of $1,750,000 when Kingbird sold it to Blossom.
During 2020, a franchise was purchased from Pina Company for $520,000. In addition, 5% of revenue from the franchise must be paid to Pina. Revenue from the franchise for 2020 was $2,400,000. Blossom estimates the useful life of the franchise to be 10 years and takes a full years amortization in the year of purchase. Blossom incurred research and development costs in 2020 as follows. Materials and equipment $153,000 Personnel 197,000 Indirect costs 117,000 $467,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started