E9-14 (Algo) Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets [LO 9-6] Bluestone
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E9-14 (Algo) Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets [LO 9-6]
Bluestone Company had three intangible assets at the end of the current year:
- A patent purchased this year fromMiller Company on January 1 for a cash cost of $5,600. When purchased, the patent had an estimated life of 8 years.
- A trademark was registered with the federal government for $12,500. Management estimated that the trademark could be worth as much as $290,000 because it has an indefinite life.
- Computer licensing rights were purchased this year on January 1 for $48,000. The rights are expected to have a four-year useful life to the company.
Required:
- Compute the acquisition cost of each intangible asset.
- Compute the amortization of each intangible for the current year ended December 31.
- Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
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