The CMS Co. began operations in January 2019. Listed below are selected transactions for 2019 and 2020:

• During 2019, $125,000 in R&D expenditures were made to develop a new product that was patented on July 1, 2019. CMS believes the patent will provide benefits for ten years. Legal fees incurred on July 1, 2019 were $24,000.
• On September 1, 2019, CMS paid EZ Company $180,000 for its patent on a successful product. The patent has six remaining years in its legal life.
• On October 1, 2019, CMS applied for and received a trade name from the government. The legal costs associated with filing for the trade name were $10,000. In addition, during November 2019, the company incurred $50,000 in advertising its name. Benefits are expected indefinitely.
• In early January 2020, CMS paid $20,000 in legal fees to defend the patent acquired from EZ. CMS's attorneys were successful in the lawsuit.
• During 2020, R&D expenditures of $90,000 were incurred in the development of a product. A patent was received on December 1, 2020. Legal fees paid in connection with the patent were $15,000. The economic life of the product is expected to be five years.

Question Content Area

Required: a1. Determine the book value as of December 31, 2020 for each intangible asset. The company amortizes its intangible assets using the straight-line method and recognizes amortization to the nearest month.

Patent on product developed in 2019	$fill in the blank 7fb71cfac029f9d_1
Patent purchased from EZ Company	$fill in the blank 7fb71cfac029f9d_2
Trade name	$fill in the blank 7fb71cfac029f9d_3
Patent on product developed in 2020	$fill in the blank 7fb71cfac029f9d_4

Question Content Area

a2. Prepare a partial balance sheet for CMS Company as of December 31, 2020, showing the intangible assets.

CMS Company Partial Balance Sheet December 31, 2020
Intangible assets:
2019 amortization Book value of patentLegal fees, 2020Noncompete agreementPatentsLegal fees, 2020	$fill in the blank dd1fddfd1f90fa1_2
2019 amortization Book value of patentLegal fees, 2020Noncompete agreementTrade name	fill in the blank dd1fddfd1f90fa1_4
Total intangible assets	$fill in the blank dd1fddfd1f90fa1_5

Question Content Area

b. Prepare a schedule to calculate CMS's expenses related to the above transactions for both 2019 and 2020. Enter all amounts as positive numbers.

	2019 Expense
Cost of trademarkLegal feesLoss on ImpairmentR and D expenseTrademark	$fill in the blank 6c289ffc8fb1006_2
Amortization expense-Patents Cost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank 6c289ffc8fb1006_4
Advertising expenseCost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank 6c289ffc8fb1006_6
Total expenses	$fill in the blank 6c289ffc8fb1006_7
	2020 Expense
Cost of trademarkLegal feesLoss on ImpairmentR and D expenseTrademark	$fill in the blank 6c289ffc8fb1006_9
Amortization expense-Patents Cost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank 6c289ffc8fb1006_11
Total expenses	$fill in the blank 6c289ffc8fb1006_12