Bluestone Company had three intangible assets at the end of the current year: a.
ID: 2420923 • Letter: B
Question
Bluestone Company had three intangible assets at the end of the current year:
a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $1,600. When purchased, the patent had an estimated life of 8 years.
b. A trademark was registered with the federal government for $10,000. Management estimated that the trademark could be worth as much as $240,000 because it has an indefinite life.
c. Computer licensing rights were purchased this year on January 1 for $42,000. The rights are expected to have a six-year useful life to the company.
1. Compute the acquisition cost of each intangible asset(acquistion cost)
Patent-
Trademark-
Licensing-
2. Compute the amortization of each intangible for the current year ended December 31(amortiztion expenses)
Patent-
Trademark-
Licensing Rights-
3. Show how these assets and any related expenses should be reported on the balance sheet and income statemen for current year. Income Statement(partial) for year ending december 31.
4. balance sheet partial at december 31(Intagibles)
patent:
trademark:
Licensing Rights
1. Compute the acquisition cost of each intangible asset(acquistion cost)
Patent-
Trademark-
Licensing-
2. Compute the amortization of each intangible for the current year ended December 31(amortiztion expenses)
Patent-
Trademark-
Licensing Rights-
3. Show how these assets and any related expenses should be reported on the balance sheet and income statemen for current year. Income Statement(partial) for year ending december 31.
4. balance sheet partial at december 31(Intagibles)
patent:
trademark:
Licensing Rights
Explanation / Answer
Ans 1 Acqusition Cost Patent $1,600 Trademark 10000 Licensing 42000 Ans 2 Amortization expense Patent for 8 years 200 Trademark 0 Licensing for 6 years 7000 Ans 3 Income Statement as on 31 December Amount Administrative and other expenses Amortization Expense Patent 200 Licencing 7000 $7,200 Ans 4 Partial Balance Sheet as on 31 Dec Assets Intangible Assets Patent $1,400 Trademark 10000 Licensing $36,000 Total $47,400