Bluestone Company had three intangible assets at the end of the current year: a.

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 $8,400. When purchased, the patent had an estimated life of 14 years. b. A trademark was registered with the federal government for $7,000. Management estimated that the trademark could be worth as much as $180,000 because it has an indefinite life c. Computer licensing rights were purchased this year on January 1 for $52,000. The rights are expected to have a four-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. Acquisition Cost Patent Trademark Licensing Rights 2. Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.) Amortization Expenses Patent Trademark Licensing Rights

Explanation / Answer

SOLUTION

(A) Acquisition Cost -

(B) Amortization expense-

(C)

BLUESTONE COMPANY

Income Statement (partial)

For the year ending December 31

(D)

BLUESTONE COMPANY

Balance Sheet (partial)

At December 31

Amount ($) Patent 8,400 Trademark 7,000 Licensing Rights 52,000

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