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The intangible assets section of Swifty Company at December 31, 2020, is presented below. Patents ($61,000 cost less $6,100 amortization) $54,900 Franchises ($35,000 cost less
The intangible assets section of Swifty Company at December 31, 2020, is presented below.
Patents ($61,000 cost less $6,100 amortization) | $54,900 | |
Franchises ($35,000 cost less $14,000 amortization) | 21,000 | |
Total | $75,900 |
The patent was acquired in January 2020 and has a useful life of 10 years. The franchise was acquired in January 2017 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2021.
Jan. 2 | Paid $18,000 legal costs to successfully defend the patent against infringement by another company. | |
Jan.June | Developed a new product, incurring $148,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | |
Sept. 1 | Paid $54,000 to an extremely large defensive lineman to appear in commercials advertising the companys products. The commercials will air in September and October. | |
Oct. 1 | Acquired a franchise for $114,000. The franchise has a useful life of 50 years. |
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