Question
The intangible assets and goodwill reported by Pharoah Corporation at December 31, 2020, follow: Copyrights (#1) $32,700 Less: Accumulated amortization 16,350 $ 16,350 Trademarks 49,800
The intangible assets and goodwill reported by Pharoah Corporation at December 31, 2020, follow:
| Copyrights (#1) | $32,700 | ||||
| Less: Accumulated amortization | 16,350 | $ 16,350 | |||
| Trademarks | 49,800 | ||||
| Goodwill | 126,870 | ||||
| Total | $193,020 |
A copyright (#1) was acquired on January 1, 2019, and has a useful life of four years. The trademarks were acquired on January 1, 2017, and are expected to have an indefinite life. The company has a December 31 year end and prepares adjusting journal entries annually. The following cash transactions may have affected intangible assets and goodwill during 2021:
| Jan. | 5 | Paid $7,020 in legal costs to successfully defend the trademarks against infringement by another company. | ||
| July | 1 | Developed a new product, incurring $189,440 in research and $50,200 in development costs with probable future benefits. The product is expected to have a useful life of 20 years. | ||
| Sept. | 1 | Paid $58,200 to a popular hockey player to appear in commercials advertising the companys products. The commercials will air in early September. | ||
| Oct. | 1 | Acquired another copyright (#2) for $162,000. The new copyright has a useful life of six years. | ||
| Dec. | 31 | Determined the fair value of the goodwill to be $85,280. There was no indication that the copyrights or trademarks were impaired. |
Show the presentation of the intangible assets and goodwill on the statement of financial position at December 31, 2021. (List Intangible assets in order of Finite Life Intangible Assets and Indefinite-life Intangible Assets. Record Development Costs before Copyrights.)
| PHAROAH CORPORATION Statement of Financial Position (Partial) For the Year Ended December 31, 2021For the Month Ended December 31, 2021December 31, 2021 | ||||||
| Assets | ||||||
| Intangible assets: | ||||||
| Total Intangible Assets and GoodwillFinite Life Intangible AssetsTotal Finite-Life Intangible AssetsAccumulated AmortizationOther Finite-Life Intangible AssetsIndefinite-Life Intangible AssetsIntangible Assets and Goodwill | ||||||
| $ | ||||||
| LessAdd: | $ | |||||
| AddLess: | ||||||
| Indefinite-Life Intangible AssetsAccumulated AmortizationOther Finite-Life Intangible AssetsTotal Intangible Assets and GoodwillFinite Life Intangible AssetsTotal Finite-Life Intangible AssetsIntangible Assets and Goodwill | ||||||
| Accumulated AmortizationOther Finite-Life Intangible AssetsTotal Finite-Life Intangible AssetsTotal Intangible AssetsIndefinite-Life Intangible AssetsIntangible Assets and GoodwillFinite Life Intangible Assets | $ | |||||
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Financial Accounting
Authors: Jill Collis
1st Edition
1137335882, 978-1137335883
