Information concerning Robin Companys intangible assets is as follows On January 1, 2015, Robin signed an agreement to operate as a franchise of Cat Copy Service, Inc for an initial franchise fee of $100,000 Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2016 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, 2015, of the 4 annual payments discounted at 15 (the implicit rate for a loan of this type) is $57,100 The agreement also provides that 6 of the revenue from the franchise must be paid to the franchisor annually Robins revenue from the franchise for 2015 was $1,100,000 Robin estimates the useful life of the franchise to be 15 years ( Hint You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments ) Robin incurred $71,500 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2014 Legal fees and other costs associated with registration of the patent totaled $21,150 Robin estimates that the useful life of the patent will be 9 years A trademark was purchased from Hong Kong Company for $29,250 on July 1, 2011 Expenditures for successful litigation in defense of the trademark totaling $7,200 were paid on July 1, 2014 Robin estimates that the useful life of the trademark will be 15 years from the date of acquisition Instructions Create a schedule showing the intangible assets section of Robins balance sheet at December 31, 2015 Show supporting computations in good form Create a schedule showing all expenses resulting from the transactions that would appear on Robins income statement for the year ended December 31, 2015 Show supporting computations in good form

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Information concerning Robin Companys intangible assets is as follows.

On January 1, 2015, Robin signed an agreement to operate as a franchise of Cat Copy Service, Inc. for an initial franchise fee of $100,000. Of this amount, $20,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $20,000 each, beginning January 1, 2016. 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, 2015, of the 4 annual payments discounted at 15% (the implicit rate for a loan of this type) is $57,100. The agreement also provides that 6% of the revenue from the franchise must be paid to the franchisor annually. Robins revenue from the franchise for 2015 was $1,100,000. Robin estimates the useful life of the franchise to be 15 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.)

Robin incurred $71,500 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2014. Legal fees and other costs associated with registration of the patent totaled $21,150. Robin estimates that the useful life of the patent will be 9 years.

A trademark was purchased from Hong Kong Company for $29,250 on July 1, 2011. Expenditures for successful litigation in defense of the trademark totaling $7,200 were paid on July 1, 2014. Robin estimates that the useful life of the trademark will be 15 years from the date of acquisition.

Instructions

Create a schedule showing the intangible assets section of Robins balance sheet at December 31, 2015. Show supporting computations in good form.

Create a schedule showing all expenses resulting from the transactions that would appear on Robins income statement for the year ended December 31, 2015. Show supporting computations in good form.