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

   • In 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 trading name from the government. The legal costs associated with filing for the trade name were $10,000. In addition, in 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.
   • In 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 108d1e036fc5061_1
   Patent purchased from EZ Company	$fill in the blank 108d1e036fc5061_2
   Trade name	$fill in the blank 108d1e036fc5061_3
   Patent on product developed in 2020	$fill in the blank 108d1e036fc5061_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 agreementPatents	$fill in the blank 0e095bf4c02dfb1_2
   2019 amortization Book value of patentLegal fees, 2020Noncompete agreementTrade name	fill in the blank 0e095bf4c02dfb1_4
   Total intangible assets	$fill in the blank 0e095bf4c02dfb1_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 dc257a07a076043_2
   Amortization expense-Patents Cost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank dc257a07a076043_4
   Advertising expenseCost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank dc257a07a076043_6
   Total expenses	$fill in the blank dc257a07a076043_7
   	2020 Expense
   Cost of trademarkLegal feesLoss on ImpairmentR and D expenseTrademark	$fill in the blank dc257a07a076043_9
   Amortization expense-Patents Cost of trademarkLegal feesLoss on ImpairmentTrademark	fill in the blank dc257a07a076043_11
   Total expenses	$fill in the blank dc257a07a076043_12