Information concerning Culver Corporations intangible assets is as follows.

1.		On January 1, 2020, Culver signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $72,500. Of this amount, $14,500 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $14,500 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $41,400. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Culvers revenue from the franchise for 2020 was $900,000. Culver estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.)
2.		Culver incurred $65,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2020. Legal fees and other costs associated with registration of the patent totaled $21,200. Culver estimates that the useful life of the patent will be 8 years.
3.		A trademark was purchased from Shanghai Company for $34,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $13,600 were paid on July 1, 2020. Culver estimates that the useful life of the trademark will be 20 years from the date of acquisition.

a. Prepare a schedule showing the intangible assets section of Culvers balance sheet at December 31, 2020.

b.

(a) Your answer is partially correct. Prepare a schedule showing the intangible assets section of Culver's balance sheet at December 31, 2020. CULVER CORPORATION Intangible Assets December 31, 2020 Franchise