Information concerning Novak Corporation's intangible assets is as follows.

1.On January 1, 2017, 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, 2018. 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, 2017, of the 4 annual payments discounted at10% (the implicit rate for a loan of this type) is $34,870. The agreement also provides that8% of the revenue from the franchise must be paid to the franchisor annually. Novak's revenue from the franchise for 2017 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, 2017. Legal fees and other costs associated with registration of the patent totaled $22,400. Novak estimates that the useful life of the patent will be8 years.3.A trademark was purchased from Shanghai Company for $30,000 on July 1, 2014. Expenditures for successful litigation in defense of the trademark totaling $35,700 were paid on July 1, 2017. Novak estimates that the useful life of the trademark will be20 years from the date of acquisition.

a schedule showing the intangible assets section of Novak's balance sheet at December 31, 2017. (Round all answers to 0 decimal places, e.g. 8,564.)

NOVAK CORPORATION

Intangible Assets

For the Year Ended December 31, 2017For the Month Ended December 31, 2017December 31, 2017

Trademark AmortizationResearch and Development CostsFranchiseFranchise FeeTotal Intangible AssetsLegal FeesPatentTrademarkFranchise AmortizationPatent Amortization

$

Franchise FeeResearch and Development CostsTrademark AmortizationFranchise AmortizationTrademarkPatentPatent AmortizationLegal FeesFranchiseTotal Intangible Assets

Franchise FeeTrademark AmortizationPatent AmortizationFranchise AmortizationTotal Intangible AssetsFranchiseResearch and Development CostsTrademarkPatentLegal Fees

Total Intangible AssetsTrademarkFranchise AmortizationPatent AmortizationTrademark AmortizationFranchisePatentFranchise FeeResearch and Development CostsLegal Fees

$

a schedule showing all expenses resulting from the transactions that would appear on Novak's income statement for the year ended December 31, 2017. (Round all answers to 0 decimal places, e.g. 8,564.)

NOVAK CORPORATION

Expenses Resulting from Selected Intangible Assets Transactions

For the Month Ended December 31, 2017For the Year Ended December 31, 2017December 31, 2017

Legal FeesTrademark AmortizationPatent AmortizationTotal Intangible AssetsTrademarkFranchise AmortizationFranchise FeeInterest ExpenseFranchiseResearch and Development CostsPatent

$

Patent AmortizationInterest ExpenseTrademark AmortizationPatentLegal FeesFranchise AmortizationTotal Intangible AssetsResearch and Development CostsFranchiseTrademarkFranchise Fee

Total Intangible AssetsInterest ExpenseLegal FeesPatent AmortizationResearch and Development CostsFranchiseFranchise AmortizationTrademark AmortizationPatentTrademarkFranchise Fee

Legal FeesFranchise FeePatent AmortizationFranchise AmortizationTrademark AmortizationTotal Intangible AssetsInterest ExpenseFranchiseTrademarkResearch and Development CostsPatent

FranchiseFranchise AmortizationPatentFranchise FeePatent AmortizationTrademark AmortizationResearch and Development CostsTotal Intangible AssetsTrademarkInterest ExpenseLegal Fees

Research and Development CostsTrademarkTrademark AmortizationLegal FeesPatentInterest ExpenseFranchise AmortizationFranchise FeeTotal Intangible AssetsFranchisePatent Amortization

$

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