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On January 1, 2017, Crane Company had a balance of $382,000 of goodwill on its balance sheet that resulted from the purchase of a small
On January 1, 2017, Crane Company had a balance of $382,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017, the company had the following additional transactions.
Jan. | 2 | Purchased a patent (7-year life) $297,150. | |
July | 1 | Acquired a 9-year franchise; expiration date July 1, 2026, $590,400. | |
Sept. | 1 | Research and development costs $176,000. |
(a) and (b)
(a) | Prepare a tabular summary to record the January 1 balance in the Goodwill account as well as the 2017 transactions related to intangibles. All costs incurred were for cash. | |
(b) | Record any necessary amortization as of December 31, 2017. |
(If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
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