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Sagot :
Answer:
Testing Services (UTS)
Balance Sheet
December 31, 2021
(Intangible Asset Section)
Details $
Intangible Assets
Goodwill 295,000
Patent 80,500
Franchise 323,000
Total Intangible Assets 698,500
Explanation:
Goodwill = Goodwill on December 31, 2021 = Cash paid - Fair value of the net identifiable assets = $2,745,000 - $2,450,000 = $295,000
Patent annual amortization expense = Patent value / Number of years UTS believes the patent will be useful = $92,000 / 8 = $11,500
Patent = Patent on December 31, 2021 = Patent value - Patent annual amortization expense = $92,000 - $11,500 = $80,500
Franchise annual amortization expense = Initial franchise fee / Contractual life of the franchise = $340,000 / 10 = $34,000
Franchise half-yearly amortization expense (from July 1 to December 31, 2021) = Franchise annual amortization expense / 2 = $34,000 / 2 = $17,000
Franchise = Franchise on December 31, 2021 = Initial franchise fee - Franchise half-yearly amortization expense = $340,000 - $17,000 = $323,000
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