Collins Ltd$.$ has these transactions related to intangible assets and goodwill in $20$X$5,$ its first year of operations:

Jan. $2$ Purchased a patent with an estimated useful life of five years and a legal life of $20$ years for $$40,000.$

Apr. $1$ Acquired another company and recorded goodwill of $$300,000$ as part of the purchase.

July $1$ Acquired a franchise for $$250,000.$ The franchise agreement is renewable and not expected to expire.

Sept. $1$ Incurred research costs of $$150,000.$

$30$ Incurred development costs of $$50,000.$ A marketable product has been identified and production will commence in the near future.

Dec. $31$ Recorded annual amortization.

$31$ Tested the intangible assets for impairment. Recoverable amounts exceeded carrying amounts in all cases. Also tested goodwill and determined that it had a recoverable amount of $$270,000.$

Instructions

Prepare the entries to record the above transactions. Assume all costs incurred during January through September were incurred for cash.

$($b$)$ Show the presentation of the intangible assets and goodwill on the statement of financial position at December $31.$