Question
Janes Company provided the following information on intangible assets: a. A patent was purchased from the Lou Company for $1,550,000 on January 1, 2014. Janes
Janes Company provided the following information on intangible assets: |
a. | A patent was purchased from the Lou Company for $1,550,000 on January 1, 2014. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lous accounting records at a net book value of $520,000 when Lou sold it to Janes. | |
b. | During 2016, a franchise was purchased from the Rink Company for $670,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. | |
c. | Janes incurred research and development costs in 2016 as follows: |
Materials and supplies | $ | 157,000 | |
Personnel | 197,000 | ||
Indirect costs | 77,000 | ||
Total | $ | 431,000 | |
d. | Effective January 1, 2016, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. |
Required: |
1. | Prepare the entries necessary for years 2014 through 2016 to reflect the above information. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) | |
a. | ||
b. | ||
c. | ||
d. | ||
2. | Prepare a schedule showing the intangible asset section of Janess December 31, 2016, balance sheet. | |
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