Comprehensive Information concerning Pren-tech Corporation's intangible assets is as follows: a. On January 1, 2019, Pren-tech signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $101,000 of this amount, $25,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $19,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 14% (the implicit rate for a loan of this type) is $55,400. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Pren- tech's revenue from the franchise for 2019 was $800,000. Pren-tech estimates the useful life of the franchise to be 10 years. b. Pren-tech incurred $74,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $17,040. Pren-tech estimates that the useful life of the patent will be 10 years. c. A trademark was purchased from Walton Company for $47,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $10,000 were paid on July 1, 2019. Pren-tech estimates that the useful ife of the trademark will be 25 years from the date of acquisition LegeWV2 Une lesing and le.. eBook Calculator 1. Prepare a schedule showing the intangible assets section of Pren-tech's balance sheet at December 31, 2019. Round final answers to the nearest dollar. Pren-tech Corporation Intangible Assets Section of Balance Sheet December 31, 2019 Franchise from Rapid Copy Service, Inc, net (Schedule 1) Patent, net (Schedule 2) Trademark, net (Schedule 3) Total Intangible assets Schedule 1: Show supporting computations for the franchise Computation of Franchise from Rapid Copy Service, Inc. Schedule 1 Cost of franchise at January 1, 2019 Amortization of franchise for 2019 Franchise balance, December 31, 2019 Schedule 2: Show supporting computations for the patent. Computation of Patent Schedule 2 Capitalized cost of patent at January 2, 2019 Amortization of patent for 2019 Patent balance, December 31, 2019 Schedule 3: Show supporting computations for the trademark. Round computations and final answers to the nearest dollar. Computation of Trademark Schedule 3 Cost of trademark a y 1, 2016 Amortization through December 31, 2018 Amortization for period January 1 - June 30, 2019 Cost of successful litigation in defense of trademark, Say 1, 2019 Balance, July 1, 2019 Amortization for period Buy 1 December 31, 2019 Balance, December 31, 2019 2. Prepare a schedule showing all expenses resulting from the transactions that would appear on Pren-tech's income statement for the year ended December 31, 2019. Enter all amounts as positive numbers Pren-tech Corporation Expenses Resulting from Intangibles Transactions For the Year Ended December 31, 2019 Franchise from Rapid Copy Service, Inc. Amortization of franchise (Schedule 1) Franchise foon revenues from operations Imputed interest personupad balance of tradise fee To franchise expenses Amortization of patent Schedule 2) Amortization of trademark (from Schedule 3) Total expenses
