Bright Designs Ltd began operations in 20X5 and, at the end of its first year of operations, reported a balance of $785,600 in an account called intangibles Upon further investigation, it is discovered that the account had been debited throughout the year as follows 5 Jan Organization costs legal fees Economic life is indefinite $ 12,400 1 Feb Patent registration legal fees re patent with 20 year life to be used in research activities 6,500 1 July Operating expenses, first six months 286,000 1 Aug Goodwill excess of purchase price of an advertising company paid over tangible assets acquired 208,000 10 Nov Copyright acquired remaining legal life is 29 years but economic life is 10 years 27,100 30 Nov Trademark registration legal fees The trademark is expected to have an indefinite economic life 10,600 5 Dec Staff training costs staff is expected to stay with the company for an average of three years however, there are no employment contracts 36,400 31 Dec Research costs incurred over the year 40 of all research costs are properly classified as capitalizable development costs The product developed will begin commercial production next year 198,600 $ 785,600 Required 1 Prepare a correcting entry that reallocates all amounts charged to intangibles to the appropriate accounts State any assumptions made (If no entry is required for a transaction event, select No journal entry required in the first account field ) 2 Calculate amortization expense on intangible assets for 20X5 Straight line amortization, to the exact month of purchase, is used All residual values are expected to be zero (Round your answers to the nearest whole dollars )

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Bright Designs Ltd. began operations in 20X5 and, at the end of its first year of operations, reported a balance of $785,600 in an account

Bright Designs Ltd. began operations in 20X5 and, at the end of its first year of operations, reported a balance of $785,600 in an account called "intangibles." Upon further investigation, it is discovered that the account had been debited throughout the year as follows:


5 Jan.	Organization costs legal fees. Economic life is indefinite.	$	12,400
1 Feb.	Patent registration legal fees re: patent with 20 year life to be used in research activities.		6,500
1 July	Operating expenses, first six months.		286,000
1 Aug.	Goodwill excess of purchase price of an advertising company paid over tangible assets acquired.		208,000
10 Nov.	Copyright acquired remaining legal life is 29 years but economic life is 10 years.		27,100
30 Nov.	Trademark registration legal fees. The trademark is expected to have an indefinite economic life.		10,600
5 Dec.	Staff training costs staff is expected to stay with the company for an average of three years however, there are no employment contracts.		36,400
31 Dec.	Research costs incurred over the year 40% of all research costs are properly classified as capitalizable development costs. The product developed will begin commercial production next year.		198,600
		$	785,600

Required: 1. Prepare a correcting entry that reallocates all amounts charged to intangibles to the appropriate accounts. State any assumptions made. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Calculate amortization expense on intangible assets for 20X5. Straight-line amortization, to the exact month of purchase, is used. All residual values are expected to be zero. (Round your answers to the nearest whole dollars.)