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 $3,200. When purchased, the patent had an estimated life of 8 years b. A trademark was registered with the federal government for $6,000. Management estimated that the trademark could be worth as much as $160,000 because it has an indefinite life c. Computer licensing rights were purchased this year on January 1 for $66,000. The rights are expected to have a six-year useful life to the company. Required . 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 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year BLUESTONE COMPANY Income Statement (partial) For the year ending December 31

Explanation / Answer

1. Acquisition cost of each intangible asset is:

patent 3,200

Trademark 6,000

Copyright 66,000

2. Amortization expense for current year is

1. Patent 3,200/8 = 400

2. Trademark not amortized

3. Copyright 66,000/6 = 11,000

3. Assets and expenses are as shown below:

Balance Sheet Intangible assets: Patent 3,200 Less: Amortization 400 2,800 Trademark 6,000 Copyright 66,000 Less: Amortization 11,000 55,000 63,800 Income Statement Amortization expense patent 400 Copyright 11,000 11,400

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.