Question
Trotman Company had three intangible assets at the end of 2012 (end of the accounting year): a. Computer software and Web development technology purchased on
Trotman Company had three intangible assets at the end of 2012 (end of the accounting year): |
a. | Computer software and Web development technology purchased on January 1, 2011, for $88,000. The technology is expected to have a four-year useful life to the company. |
b. | A patent purchased from Ian Zimmer on January 1, 2011, for a cash cost of $39,000. Zimmer had registered the patent with the U.S. Patent Office five years ago. |
c. | An internally developed trademark registered with the federal government for $18,000 on November 1, 2012. Management decided to capitalize the $18,000 as an intangible asset with an indefinite life. |
Required: | |
1. | Compute the acquisition cost of each intangible asset.(Omit the "$" sign in your response.) |
Acquisition cost | |
Technology | $ |
Patent | |
Trademark |
2. | Compute the amortization of each intangible at December 31, 2012. The company does not use contra-accounts. Assume the company uses straight-line method.(Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) |
Amortization | |
Technology | $ |
Patent | |
Trademark |
3. | Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2012.(Omit the "$" sign in your response.) |
Income statement for 2012: | |
Operating expenses: | |
(Click to select)Amortization expenseTechnologyDepreciation expensePatentAccumulated depreciation | $ |
Balance sheet at December 31, 2012: | ||
(under noncurrent assets) | ||
Intangibles: | ||
(Click to select)Accumulated depreciationPatentTechnologyTrademarkInventories | $ | |
(Click to select)TrademarkInventoriesPatentTechnologyAccumulated depreciation | ||
(Click to select)PatentAccumulated depreciationTrademarkTechnologyInventories | ||
$ | ||
rev: 11_21_2013_QC_38170
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