The intangible assets section of Pronghorn Corporation’s balance sheet at Decemb

Question

The intangible assets section of Pronghorn Corporation’s balance sheet at December 31, 2017, is presented here.
Patents ($87,700 cost less $9,000 amortization) $78,700 Copyrights ($66,000 cost less $55,800 amortization) 10,200 Total $88,900
The patent was acquired in January 2017 and has a useful life 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 $63,000 legal costs to successfully defend the patent against infringement by another company. Jan.– June Developed a new product, incurring $248,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $40,000. Sept. 1 Paid $52,000 to a quarterback to appear in commercials advertising the company’s products. The commercials will air in September and October. Oct. 1 Acquired a copyright for $285,000. The copyright has a useful life and legal life of 50 years. The intangible assets section of Pronghorn Corporation’s balance sheet at December 31, 2017, is presented here.
Patents ($87,700 cost less $9,000 amortization) $78,700 Copyrights ($66,000 cost less $55,800 amortization) 10,200 Total $88,900
The patent was acquired in January 2017 and has a useful life 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 $63,000 legal costs to successfully defend the patent against infringement by another company. Jan.– June Developed a new product, incurring $248,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $40,000. Sept. 1 Paid $52,000 to a quarterback to appear in commercials advertising the company’s products. The commercials will air in September and October. Oct. 1 Acquired a copyright for $285,000. The copyright has a useful life and legal life of 50 years. $78,700 10,200 $88,900 Date Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS Date Account Titles and Explanation Debit Credit Dec. 31 (To record amortization of patents) Dec. 31 (To record amortization of copyrights) SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS SHOW LIST OF ACCOUNTS

Problem 9-5A

The intangible assets section of Pronghorn Corporation’s balance sheet at December 31, 2017, is presented here.
Patents ($87,700 cost less $9,000 amortization) $78,700 Copyrights ($66,000 cost less $55,800 amortization) 10,200 Total $88,900
The patent was acquired in January 2017 and has a useful life 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 $63,000 legal costs to successfully defend the patent against infringement by another company. Jan.– June Developed a new product, incurring $248,000 in research and development costs. A patent was granted for the product on July 1, and its useful life is equal to its legal life. Legal and other costs for the patent were $40,000. Sept. 1 Paid $52,000 to a quarterback to appear in commercials advertising the company’s products. The commercials will air in September and October. Oct. 1 Acquired a copyright for $285,000. The copyright has a useful life and legal life of 50 years.

Explanation / Answer

PART A --- Journal Entries for above transaction --

PART B -- Prepare journal entries to record the 2018 amortization expense for intangible assets--

Part C -- Prepare the intangible assets section of the balance sheet at December 31, 2018.

Date Particulars Debit Credit 2-Jan Legal Fees : Patent 63000 Cash 63000 Jan - June R&D Expense 248000 Cash 248000 1-Sep Advertising expenses 52000 Cash 52000 1-Oct Copyright 285000 Cash 285000

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