Problem 12-3 (Part Level Submission) Information concerning Bridgeport Corporations intangible assets is as follows. 1. On January 1, 2017, Bridgeport signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $50,000. Of this amount, $10,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $10,000 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 at 9% (the implicit rate for a loan of this type) is $32,400. The agreement also provides that 6% of the revenue from the franchise must be paid to the franchisor annually. Bridgeports revenue from the franchise for 2017 was $840,000. Bridgeport 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. Bridgeport incurred $80,000 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 $25,600. Bridgeport estimates that the useful life of the patent will be 8 years. 3. A trademark was purchased from Shanghai Company for $50,000 on July 1, 2014. Expenditures for successful litigation in defense of the trademark totaling $25,500 were paid on July 1, 2017. Bridgeport estimates that the useful life of the trademark will be 20 years from the date of acquisition. (a) Your answer is partially correct. Try again. Prepare a schedule showing the intangible assets section of Bridgeports balance sheet at December 31, 2017. (Round all answers to 0 decimal places, e.g. 8,564.) BRIDGEPORT CORPORATION Intangible Assets $ Problem 12-6 (Part Level Submission) During 2015, Sunland Company purchased a building site for its proposed research and development laboratory at a cost of $41,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $280,000 and was placed in service on January 2, 2017. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2017 appears below. Number of Projects Salaries and Employee Benefits Other Expenses (excluding Building Depreciation Charges) Completed projects with long-term benefits 18 $82,000 $44,000 Abandoned projects or projects that benefit the current period 10 69,000 12,000 Projects in processresults indeterminate 8 39,000 9,000 Total 36 $190,000 $65,000 Upon recommendation of the research and development group, Sunland Company acquired a patent for manufacturing rights at a cost of $76,000. The patent was acquired on April 1, 2016, and has an economic life of 10 years. If generally accepted accounting principles were followed, how would the items above relating to research and development activities be reported on the following financial statements? (a) Your answer is partially correct. Try again. The companys income statement for 2017. (Do not round intermediate calculations and round final answer to 0 decimal places, e.g. 5,275.) Sunland Company Income Statement (Partial) $ Link to Text By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 1 of 3 used Save for later Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Problem 12-6 (Part Level Submission) During 2015, Sunland Company purchased a building site for its proposed research and development laboratory at a cost of $41,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $280,000 and was placed in service on January 2, 2017. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2017 appears below. Number of Projects Salaries and Employee Benefits Other Expenses (excluding Building Depreciation Charges) Completed projects with long-term benefits 18 $82,000 $44,000 Abandoned projects or projects that benefit the current period 10 69,000 12,000 Projects in processresults indeterminate 8 39,000 9,000 Total 36 $190,000 $65,000 Upon recommendation of the research and development group, Sunland Company acquired a patent for manufacturing rights at a cost of $76,000. The patent was acquired on April 1, 2016, and has an economic life of 10 years. If generally accepted accounting principles were followed, how would the items above relating to research and development activities be reported on the following financial statements? (a) Your answer is partially correct. Try again. The companys income statement for 2017. (Do not round intermediate calculations and round final answer to 0 decimal places, e.g. 5,275.) Sunland Company Income Statement (Partial) $ Link to Text By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 1 of 3 used Save for later Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. Problem 12-6 (Part Level Submission) During 2015, Sunland Company purchased a building site for its proposed research and development laboratory at a cost of $41,000. Construction of the building was started in 2015. The building was completed on December 31, 2016, at a cost of $280,000 and was placed in service on January 2, 2017. The estimated useful life of the building for depreciation purposes was 20 years. The straight-line method of depreciation was to be employed, and there was no estimated residual value. Management estimates that about 50% of the projects of the research and development group will result in long-term benefits (i.e., at least 10 years) to the corporation. The remaining projects either benefit the current period or are abandoned before completion. A summary of the number of projects and the direct costs incurred in conjunction with the research and development activities for 2017 appears below. Number of Projects Salaries and Employee Benefits Other Expenses (excluding Building Depreciation Charges) Completed projects with long-term benefits 18 $82,000 $44,000 Abandoned projects or projects that benefit the current period 10 69,000 12,000 Projects in processresults indeterminate 8 39,000 9,000 Total 36 $190,000 $65,000 Upon recommendation of the research and development group, Sunland Company acquired a patent for manufacturing rights at a cost of $76,000. The patent was acquired on April 1, 2016, and has an economic life of 10 years. If generally accepted accounting principles were followed, how would the items above relating to research and development activities be reported on the following financial statements? (a) Your answer is partially correct. Try again. The companys income statement for 2017. (Do not round intermediate calculations and round final answer to 0 decimal places, e.g. 5,275.) Sunland Company Income Statement (Partial) $ Link to Text By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 1 of 3 used Save for later Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.