Answered

Westonci.ca is the trusted Q&A platform where you can get reliable answers from a community of knowledgeable contributors. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

E9-14 (Algo) Computing and Reporting the Acquisition and Amortization of Three Different Intangible Assets [LO 9-6] Bluestone Company had three intangible assets at the end of the current year: A patent purchased this year from Miller Company on January 1 for a cash cost of $3,200. When purchased, the patent had an estimated life of 8 years. A trademark was registered with the federal government for $6,000. Management estimated that the trademark could be worth as much as $160,000 because it has an indefinite life. Computer licensing rights were purchased this year on January 1 for $66,000. The rights are expected to have a six-year useful life to the company. Required: Compute the acquisition cost of each intangible asset. Compute the amortization of each intangible for the current year ended December 31. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year

Sagot :

anthougo

a) The computation of the acquisition cost of each intangible asset for  Bluestone Company is as follows:

Acquisition Costs:

  1. Patent = $3,200
  2. Trademark cost = $6,000
  3. Computer licensing rights purchased = $66,000

b) The computation of the amortization of each intangible asset for  Bluestone Company is as follows:

Amortization Expense for the current year

  1. Patent = $400 ($3,200/8)
  2. Trademark cost = $0
  3. Computer licensing rights purchased = $11,000 ($66,000/6)

c) The way that these intangible assets and their related expenses should be reported on the balance sheet and income statement for the current year ended December 31, for Bluestone Company, is as follows:

Bluestone Company

Balance Sheet

As of the Current Year ended on December 31

Intangible Assets:

Patent                                       $3,200

Less Amortization Expense       $400       $2,800

Trademark cost                                          $6,000

Computer licensing rights  $66,000

Less Amortization Expense $11,000     $55,000

Bluestone Company

Income Statement

For the Current Year ended on December 31

Amortization Expenses:

Patent           $400

Computer licensing rights $11,000

Data and Calculations:

January 1 Purchase of Patent = $3,200

Estimated useful life = 8 years

Trademark cost = $6,000

Trademark value = $160,000

Estimated useful life = Indefinite

No amortization expense but an annual reassessment of its value

Computer licensing rights purchased = $66,000

Estimated useful life = 6 years

Learn more about intangible assets at https://brainly.com/question/7274714

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.