Instructions Intangible Long-Term Assets 1. Using the straight-line method, calc
ID: 2585823 • Letter: I
Question
Instructions Intangible Long-Term Assets 1. Using the straight-line method, calculate the amortization of the patent, copyright, and Franchise. leave it blank. 2. Prepare general journal entries to record the end-of-year amortizations. If an amount box does not require an entry, Track Town Co. had the following transactions involving intangible assets: Jan. 1 Purchased a patent for leather soles for $10,000 and estimated its useful life to be 10 years Apr. 1 July 1 Signed a 5-year franchise agreement and opened a Purchased a copyright for a design for $15,000 with a life left on the copyright of 25 years. The estimated remaining (economic) life of the copyright is five years. 50,000 to the franchisor Starting Line high tech running shoe store. Paid $Explanation / Answer
1-
cost of patent/copyright/franchise
life of patent/copyright/franchise
amount of amortization using straight line method = cost / life
amount of amortization using straight line method = cost / life
10000
10
(10000/10)
1000
15000
5
(15000/5)*9/12
2250
50000
5
5000
5000
2-
Journal Entries
date
explanation
debit
credit
31-Dec
amortization expense-patent
1000
accumulated amortization-patent
1000
31-Dec
amortization expense-Copyright
2250
accumulated amortization-copyright
2250
31-Dec
amortization expense-franchise
5000
accumulated amortization-Franchise
5000
1-
cost of patent/copyright/franchise
life of patent/copyright/franchise
amount of amortization using straight line method = cost / life
amount of amortization using straight line method = cost / life
10000
10
(10000/10)
1000
15000
5
(15000/5)*9/12
2250
50000
5
5000
5000
2-
Journal Entries
date
explanation
debit
credit
31-Dec
amortization expense-patent
1000
accumulated amortization-patent
1000
31-Dec
amortization expense-Copyright
2250
accumulated amortization-copyright
2250
31-Dec
amortization expense-franchise
5000
accumulated amortization-Franchise
5000