Problem 9-7A (Part Level Submission)The intangible assets section of Glover Company at December 31, 2013, is presented below. | Patents ($61,400 cost less $6,140 amortization) | | $55,260 | | Franchises ($36,200 cost less $14,480 amortization) | | 21,720 | | Total | | $76,980 |
The patent was acquired in January 2013 and has a useful life of 10 years. The franchise was acquired in January 2010 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2014. | Jan. 2 | | Paid $40,860 legal costs to successfully defend the patent against infringement by another company. | | Jan.–June | | Developed a new product, incurring $137,570 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | | Sept. 1 | | Paid $55,760 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October. | | Oct. 1 | | Acquired a franchise for $135,000. The franchise has a useful life of 50 years. |
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kinbi
11 years ago
3
