Kreiser Company had three intangible assets at the end of 2004 (end of the accounting year): a.
Question:
Kreiser Company had three intangible assets at the end of 2004 (end of the accounting year):
a. A patent purchased from J. Miller on January 1 . 2004, for a cash cost of $5,640. Miller had registered the patent with the U.S. Patent Office five years ago.
b. An internally developed trademark registered with the federal government for $10,000. Management decided the trademark has an indefinite life.
c. Computer software and web development technology purchased on January 1, 2003 for $60,000.
The technology is expected to have a four-year useful life to the company.
Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible at December 3 1 , 2004. The company does not use contra-accounts. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2004.
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