Exercise 9-12

On January 1, 2017, Cullumber Company had a balance of $359,500 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions.

Jan.2Purchased a patent (6-year life) $324,450.July1Acquired a8-year franchise; expiration date July 1, 2,025, $612,000.Sept.1Research and development costs $184,000.

Prepare the necessary entries to record the transactions related to intangibles. All costs incurred were for cash.(Record entries in the order displayed in the problem statement. Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit

1/2/17

7/1/17

9/1/17

1/2/17

7/1/17

9/1/17

1/2/17

7/1/17

9/1/17

SHOW LIST OF ACCOUNTS

Make an entry as of December 31, 2017, recording any necessary amortization.(Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

SHOW LIST OF ACCOUNTS

Indicate what the intangible asset account balances should be on December 31, 2017.

Patent$

Franchise$