Information concerning Novak Corporations intangible assets is as follows 1 On January 1, 2020, Novak signed an agreement to operate as a franchisee of Hsian Copy Service, Inc for an initial franchise fee of $55,000 Of this amount, $11,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $11,000 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 14 (the implicit rate for a loan of this type) is $32,050 The agreement also provides that 8 of the revenue from the franchise must be paid to the franchisor annually Novaks revenue from the franchise for 2020 was $930,000 Novak 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 Novak incurred $85,000 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 $22,400 Novak estimates that the useful life of the patent will be 8 years 3 A trademark was purchased from Shanghai Company for $30,000 on July 1, 2017 Expenditures for successful litigation in defense of the trademark totaling $13,600 were paid on July 1, 2020 Novak estimates that the useful life of the trademark will be 20 years from the date of acquisition Your answer is partially correct Prepare a schedule showing the intangible assets section of Novak's balance sheet at December 31, 2020 NOVAK CORPORATION Intangible Assets December 31, 2020 Trademark Franchise Patent Total Intangible Assets e Textbook and Media Your answer is partially correct Prepare a schedule showing all expenses resulting from the transactions that would appear on Novak's income statement for the year ended December 31, 2 NOVAK CORPORATION Expenses Resulting from Selected Intangible Assets Transactions For the Year Ended December 31, 2020 Interest Expense Franchise Amortization Franchise Fee Patent Amortization Trademark Amortization Total Intangible Assets e Textbook and Media

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Information concerning Novak Corporations intangible assets is as follows. 1. On January 1, 2020, Novak signed an agreement to operate as a franchisee of Hsian

Information concerning Novak Corporations intangible assets is as follows.

1.		On January 1, 2020, Novak signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $55,000. Of this amount, $11,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $11,000 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 14% (the implicit rate for a loan of this type) is $32,050. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Novaks revenue from the franchise for 2020 was $930,000. Novak 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.		Novak incurred $85,000 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 $22,400. Novak estimates that the useful life of the patent will be 8 years.
3.		A trademark was purchased from Shanghai Company for $30,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $13,600 were paid on July 1, 2020. Novak estimates that the useful life of the trademark will be 20 years from the date of acquisition.

Your answer is partially correct. Prepare a schedule showing the intangible assets section of Novak's balance sheet at December 31, 2020. NOVAK CORPORATION Intangible Assets December 31, 2020 Trademark Franchise Patent Total Intangible Assets e Textbook and Media Your answer is partially correct. Prepare a schedule showing all expenses resulting from the transactions that would appear on Novak's income statement for the year ended December 31, 2 NOVAK CORPORATION Expenses Resulting from Selected Intangible Assets Transactions For the Year Ended December 31, 2020 Interest Expense Franchise Amortization Franchise Fee Patent Amortization Trademark Amortization Total Intangible Assets e Textbook and Media