Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CALCULATOR PRINTER VERSION BACK NEXT Problem 12-03 (Part Level Submission) Information concerning Sarasota Corporation's intangible assets is as follows. 1. On January 1, 2020. Sarasota

image text in transcribed
CALCULATOR PRINTER VERSION BACK NEXT Problem 12-03 (Part Level Submission) Information concerning Sarasota Corporation's intangible assets is as follows. 1. On January 1, 2020. Sarasota signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $100,000 of this amount $20.000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $57.100. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Sarasota's revenue from the franchise for 2020 was $910,000. Sarasota estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.) 2. Sarasota incurred $70,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2020. Legal fees and other costs associated with registration of the patent totaled $23,200. Sarasota estimates that the useful life of the patent will be 8 years. 3. A trademark was purchased from Shanghal Company for $38,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $8.500 were paid on July 1, 2020. Sarasota estimates that the useful life of the trademark will be 20 years from the date of acquisition (a) Your answer is partially correct. Try again. Prepare a schedule showing the intangible assets section of Sarasota's balance sheet at Dece SARASOTA CORPORATION Intangible Assets December 31, 2020 Trademark Total Intang ble Assets LINK TO TEXT LINK TO TEXT LINK SUBMIT

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

IATF 16949 2016 Plus ISO 9001 2015 Audit Guide And Checklist With ISO 9001 Customer Specific Core Tools And CQI Requirments

Authors: Patrick Ambrose, Systemsthinking .works

2nd Edition

154703355X, 978-1547033553

More Books

Students also viewed these Accounting questions

Question

6. Describe why communication is vital to everyone

Answered: 1 week ago