Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) $348,800 4/1/20 Purchase goodwill (indefinite life) 346,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 426,000 8/1/20 Payment of copyright (5-year life) 151,200 9/1/20 Research and development costs 216,000 $1,488,000 1). Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. 2). Make the entry as of December 31, 2020, recording any necessary amortization 3). Make the entry as of December 31, 2020, recording any necessary amortization Use straight-line amortization
Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020. 1/2/20 Purchased patent (8-year life) $348,800 4/1/20 Purchase goodwill (indefinite life) 346,000 7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 426,000 8/1/20 Payment of copyright (5-year life) 151,200 9/1/20 Research and development costs 216,000 $1,488,000 1). Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. 2). Make the entry as of December 31, 2020, recording any necessary amortization 3). Make the entry as of December 31, 2020, recording any necessary amortization Use straight-line amortization
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.
| 1/2/20 | Purchased patent (8-year life) |
$348,800
|
||
| 4/1/20 | Purchase |
346,000
|
||
| 7/1/20 | Purchased franchise with 10-year life; expiration date 7/1/30 |
426,000
|
||
| 8/1/20 | Payment of copyright (5-year life) |
151,200
|
||
| 9/1/20 | Research and development costs |
216,000
|
||
|
$1,488,000
|
1). Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.
2). Make the entry as of December 31, 2020, recording any necessary amortization
3). Make the entry as of December 31, 2020, recording any necessary amortization
Use straight-line amortization
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