System Announcements CALCULATOR PRINTER VERSION LACK NET Problem 12-03 (Part Level Submission) Information concerning Sarasota Corporation's intangible assets is as follows. 1. On January 1, 2020, Sarasota signed an agreement to operate as a franchisee of Hsian 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, 2021. 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, 2020, 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 8% of the revenue from the franchise must be paid to the franchisor annually. Sarasota's revenue from the franchise for 2020 was $910,000. Sarasota 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. Sarasota incurred $70,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2020. Legal fees and other costs associated with registration of the patent totaled $23,200. Sarasota estimates that the useful life of the patent will be 8 years 3. A trademark was purchased from Shanghai Company for $ 38,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $8.500 were paid on July 1, 2020. Sarasota estimates that the useful life of the trademark will be 20 years from the date of acquisition Your answer is correct. Prepare a schedule showing the intangible assets section of Sarasota balance sheet at December 31, 2020 SARASOTA CORPORATION Intangible Assets December 31, 2020 2 11 III III 39.00 H- Trademark Total Intangible Assets SHOW SOLUTION LINK TO TOT LINK TO TEXT LINK TO TEXT T itangible Assets 129,290 SHOW SOLUTION LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 2 of 5 used (b) Prepare a schedule showing all expenses resulting from the transactions that would appear on Sarasota's Income statement for the year ended December 31, 2020 SARASOTA CORPORATION Expenses Resulting from Selected Intangible Assets Transactions LINK TO TEXT LINK TO TEXT LINK TO TEXT SUBMIT ANSWER Attempts: 0 of 5 used SAVE FOR LATER