Please complete E12-6 in the third image.
(LO 2, 3, E12-6 (Recognition and Amortization of Intangibles) Institute Limited organized late in 2016 and set up a single 4, 5) account for all intangible assets. The following summary shows the entries in 2017 (all debits) that have been recorded XLS in Intangible Assets since then: Jan. 2 Purchased patent (8-year life) $ 320,000 Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000 Apr. Purchased goodwill (indefinite life) 310,000 July 1 Purchased franchise with 10-year life; expiration date July 1, 2027 250,000 1 Promotional costs to increase the future economic benefit of the goodwill that was purchased on Apr. 1 33,000 Aug. Payment for copyright (5-year life) 140,000 Purchased trademark (3-year life) 15,000 Purchased customer list (2-year life) 10,000 Sept. 1 Research costs 239,000 $1,338,000 Instructions (a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.*Exercise 12-6 (Part Level Submission) Sandhill Limited organized late in 2016 and set up a single account for all intangible assets. The following summary shows the entries in 2017 (all debits) that have been recorded in Intangible Assets since then: Jan. 2 Purchased patent (8-year life) $330,000 Mar. 31 Costs to search for new ways to apply patent that was purchased on Jan. 2 21,000 Apr. 1 Purchased goodwill (indenite life) 310,000 July. 1 Purchased franchise with 10-year life; expiration date July 1, 2027 252,000 1 Promotional costs to increase the future economic benet of the goodwill that was purchased on Apr. 1 33,000 Aug. 1 Payment for copyright (5-year life) 137,000 1 Purchased trademark (3-year life) 14,400 1 Purchased customer list (2-year life) 8,400 Sept. 1 Research costs 240,000 $1,345,800 *(a) Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter a for the amounts.) EXERCISE 12-6 (15-20 minutes) a) Journal entry to classify into proper accounts Intangible Assets - Patents .............................. 320,000 Goodwill ............................................................. 310,000 Intangible Assets - Franchises ........................ 250,000 Research and Development Expense ............. 260,000* Intangible Assets Copyrights ........................ 140,000 Advertising Expense ........................................... 33,000 Intangible Assets - Trademarks..........................15,000 Intangible Assets - Customer List......................10,000 Intangible Assets ..................................................... 1,338,000 * $239,000 + $21,000 = $260,000
