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wifty Corp. a public company incorporated on June 28, 2019, set up a single account for all of its intangible assets. The following summary discloses
wifty Corp. a public company incorporated on June 28, 2019, set up a single account for all of its intangible assets. The following summary discloses the debit entries that were recorded during 2019 and 2020 in that account: Oct. 1 Dec. 31 32,000 INTANGIBLE ASSETS-SWIFTY July 1, 2019 8-year franchise; expiration date of June 30, 2027 $48,000 Advance payment on office lease (2-year lease) Net loss for 2019 including incorporation fee, $1,000 related legal fees of organizing. $5,400; expenses of recruiting and training staff for start-up of new business, $4,100 Feb. 15, 2020 Patent purchased (10-year life) Direct costs of acquiring a 5-year licensing agreement 80,100 Apr. Goodwill purchased (indefinite life) June 1 Legal fee for successful defence of patent (see above) 12.815 Costs of research department for year 75,000 Royalties paid under licensing agreement (see above) 16,300 76.800 Mar. 1 1 311,400 Dec. 31 31 2,775 The new business started up on July 2, 2019. No amortization was recorded for 2019 or 2020. The goodwill purchased on April 1, 2020, includes in-process development costs that meet the six development stage criteria, valued at $179.000. The company estimates that this amount will help it generate revenues over a 10-year period. (a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as at December 31, 2020, and record any necessary amortization so that all balances are appropriate as at that date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required
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