Comprehensive

Information concerning Talvon Corporation's intangible assets is as follows:

1. On January 1, 2019, Talvon signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $79,000. Of this amount, $27,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $13,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $39,500. The agreement also provides that 6% of the revenue from the franchise must be paid to the franchisor annually. Talvon's revenue from the franchise for 2019 was $790,000. Talvon estimates the useful life of the franchise to be 5 years.
2. Talvon incurred $71,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $16,720. Talvon estimates that the useful life of the patent will be 8 years.
3. A trademark was purchased from Walton Company for $34,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $11,900 were paid on July 1, 2019. Talvon estimates that the useful life of the trademark will be 20 years from the date of acquisition.

Required:

Question Content Area

1. Prepare a schedule showing the intangible assets section of Talvon's balance sheet at December 31, 2019. Round final answers to the nearest dollar.

Talvon Corporation Intangible Assets Section of Balance Sheet December 31, 2019

Franchise from Rapid Copy Service, Inc., net (Schedule 1)	$fill in the blank d9492700afb5ff0_1
Patent, net (Schedule 2)	fill in the blank d9492700afb5ff0_2
Trademark, net (Schedule 3)	fill in the blank d9492700afb5ff0_3
Total intangible assets	$fill in the blank d9492700afb5ff0_4

Question Content Area

Schedule 1: Show supporting computations for the franchise.

Computation of Franchise from Rapid Copy Service, Inc. Schedule 1

Cost of franchise at January 1, 2019	$fill in the blank 03df2ef6f03101b_1
Amortization of franchise for 2019	fill in the blank 03df2ef6f03101b_2
Franchise balance, December 31, 2019	$fill in the blank 03df2ef6f03101b_3

Question Content Area

Schedule 2: Show supporting computations for the patent.

Computation of Patent Schedule 2

Capitalized cost of patent at January 2, 2019	$fill in the blank 2db09af3ef9ef87_1
Amortization of patent for 2019	fill in the blank 2db09af3ef9ef87_2
Patent balance, December 31, 2019	$fill in the blank 2db09af3ef9ef87_3

Question Content Area

Schedule 3: Show supporting computations for the trademark. Round computations and final answers to the nearest dollar.

Computation of Trademark Schedule 3

Cost of trademark at July 1, 2016	$fill in the blank df5cf0fb403106d_1
Amortization through December 31, 2018	fill in the blank df5cf0fb403106d_2
Amortization for period January 1 - June 30, 2019	fill in the blank df5cf0fb403106d_3
Cost of successful litigation in defense of trademark, July 1, 2019	fill in the blank df5cf0fb403106d_4
Balance, July 1, 2019	$fill in the blank df5cf0fb403106d_5
Amortization for period July 1 - December 31, 2019	fill in the blank df5cf0fb403106d_6
Balance, December 31, 2019	$fill in the blank df5cf0fb403106d_7

Question Content Area

2. Prepare a schedule showing all expenses resulting from the transactions that would appear on Talvon's income statement for the year ended December 31, 2019. Enter all amounts as positive numbers.

Talvon Corporation Expenses Resulting from Intangibles Transactions For the Year Ended December 31, 2019

Franchise from Rapid Copy Service, Inc.
Amortization of franchise (Schedule 1)	$fill in the blank 79d2fd07dfb500c_1
Franchise fee on revenues from operations	fill in the blank 79d2fd07dfb500c_2
Imputed interest expense on unpaid balance of initial franchise fee	fill in the blank 79d2fd07dfb500c_3
Total franchise expenses	$fill in the blank 79d2fd07dfb500c_4
Amortization of patent (Schedule 2)	fill in the blank 79d2fd07dfb500c_5
Amortization of trademark (from Schedule 3)	fill in the blank 79d2fd07dfb500c_6
Total expenses	$fill in the blank 79d2fd07dfb500c_7