Crazy Asian
03-28-2009, 08:08 PM
The intangible assets section of the balance sheet for El-Gazzar Company at December 31, 2007, is presented here.
Patent ($59,570 cost less $5,957 amortization) $53,613
Copyright ($36,180 cost less $25,330 amortization) 10,850
Total $64,463
The patent was acquired in January 2007 and has a useful life of 10 years. The copyright was acquired in January 2001 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2008.
Jan. 2 Paid $36,900 legal costs to successfully defend the patent against infringement by another company.
Jan.-June Developed a new product, incurring $205,100 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $8,080.
Sept. 1 Paid $39,560 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1 Acquired a copyright for $183,900. The copyright has a useful life of 50 years.
Prepare journal entries to record the transactions. (Round all answers to 0 decimal places.)
Date Account / Description Debit Credit
Jan. 2 Patents $ 36900
Cash $ 36900
Jan-June Research and development expense $ 205100
Cash $ 205100
July 1 Patents $ 8080
Cash $ 8080
Sept 1 Advertising expense $ 39560
Cash $ 39560
Oct. 1 Copyright $ 183900
Cash $ 183900
This is the part where I'm stuck at:
Prepare journal entries to record the 2008 amortization expense.
Date Account / Description Debit Credit
Dec. 31 Amortization expense-patents $
Patents $
(To record the amortization on patents.)
Dec. 31 Amortization expense-copyright $
Copyright $
(To record the amortization on copyright.)
Post the journal entries and amortization expense based on the above information to T-accounts. Complete the intangible assets section of the balance sheet at December 31, 2008 below.
Intangible assets:
Patent $
Copyright $
Total intangible assets $278546
Patent ($59,570 cost less $5,957 amortization) $53,613
Copyright ($36,180 cost less $25,330 amortization) 10,850
Total $64,463
The patent was acquired in January 2007 and has a useful life of 10 years. The copyright was acquired in January 2001 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2008.
Jan. 2 Paid $36,900 legal costs to successfully defend the patent against infringement by another company.
Jan.-June Developed a new product, incurring $205,100 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $8,080.
Sept. 1 Paid $39,560 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1 Acquired a copyright for $183,900. The copyright has a useful life of 50 years.
Prepare journal entries to record the transactions. (Round all answers to 0 decimal places.)
Date Account / Description Debit Credit
Jan. 2 Patents $ 36900
Cash $ 36900
Jan-June Research and development expense $ 205100
Cash $ 205100
July 1 Patents $ 8080
Cash $ 8080
Sept 1 Advertising expense $ 39560
Cash $ 39560
Oct. 1 Copyright $ 183900
Cash $ 183900
This is the part where I'm stuck at:
Prepare journal entries to record the 2008 amortization expense.
Date Account / Description Debit Credit
Dec. 31 Amortization expense-patents $
Patents $
(To record the amortization on patents.)
Dec. 31 Amortization expense-copyright $
Copyright $
(To record the amortization on copyright.)
Post the journal entries and amortization expense based on the above information to T-accounts. Complete the intangible assets section of the balance sheet at December 31, 2008 below.
Intangible assets:
Patent $
Copyright $
Total intangible assets $278546