Problem 9-SA (Part Level Submission) The intangible assets section of Blue Corpo

Question

Problem 9-SA (Part Level Submission) The intangible assets section of Blue Corporation's balance sheet at December 31, 2017, is presented here $66,200 Copyrights ($38,500 cost less $25,100 amortization) Total 13,400 $79,600 The patent was acquired in January 2017 and has a useful ife of 10 years. The copyright was acquired in January 2011 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2018. Jan. 2 Paid $45,000 legal costs to Jan June Developed a new product, incurring $238,500 in research and development costs. A patent was granted for the product on July 1, and its useful life is sfully defend the patent against infringement by another company Sept. Oct. equal to its legal life. Legal and other costs for the patent were $10,000, 1 Paid $57,500 to a quarterback to appear in commercials advertising the company's products. The commercials will alir in September and October 1 Acquired a copyright for $209,000. The copyright has a useful life and legal life of 50 years.

Explanation / Answer

Journal Entries:

Dec 31 2018

Debit Amortisation expense $36830

Credit Accumulated amortisation $36830

(being amortisation of the Patents)

Dec 31 2018

Debit Amortisation expense $8030

Credit Accumulated amortisation $8030

(being amortisation of the copyrights)

Expense on calculation Patents Copyright prior to jan 1 18-patent 74800/10 7480 - copyright 38500/10 3850 Jan2 patent 45000/10 4500 Jan - June patent (238500+10000) 248500/10 24850 Oct 1 209000//50 4180 Total 36830 8030

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