% CH Oh 95 Paris f B 0 F G H 4 5 years A 1 Question 2 - Accounting for Intangible Assets PART A: Each of the following items took place on Jan 1, 2019 at the Recreational Robot Co., discuss how each item should be accounted for and if appropriate, cakulate the 2 amount of amortization for one year using the straight-line method. a)Goodwill arose when a company was purchased. The purchase price of the company was 400,000 and the identifiable assets were valued at 300,000. The Goodwill is assumed to 3 have an indefinite life. b)The company paid $40,000 to buy the Franchise rights to sell a special product for the next c)The company purchased a patent for $100,000 for a special production process that they will use for the next 10 years. At the beginning of the year, they also paid $20,000 in legal 5 fees to protect the patent when a competitor tried to use the same process. djThe company spent $60,000 in Research and Development costs to find a new formula for 6 a chemical compound. 7 e)The company purchased a Trademark for $30,000 8 PART B: Prepare the Intangibles section of Balance Sheet at the end of the year. 9 PART C: What is the total expense relating to these intangibles for the year. 10 11 12 13 14 15