Gill Company, organized in 2015, has the following transactions related to intan

Question

Gill Company, organized in 2015, has the following transactions related to intangible assets 1/2/15 Purchased patent (8-year life) 4/1/15Goodwill purchased (indefinite life) 7/1/15 10-year franchise; expiration date 7/1/2025 9/1/15 Research and development costs $639,440 361,010 399,200 169,730 (a1) Your answer is partially correct. Try again Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2015, recording any necessary amortization. (Record journal entries in the order presented in the problem. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) DateAccount Titles and Explanation Debit Credit 1/2/15 Patents 639,440 Cash 639,440 4/1/15Goodwill 361,010 Cash 361,010 7/1/15 | Franchises 399,200 Cash 399,200 9/1/15 Research and Developmen 169,730 Cash 169,730

Explanation / Answer

12-31-2015 Amortization expenses            99,890         Patents          79,930      Franchises          19,960 ( to record amortization expenses for the year) *Depreciation for Franchises Cost   - 399200 Useful life - 10 years depreciation = coast - residual value/ number of years depreciation = 399200/10 = 39920 Asset used during the years = 01-07-2015 to 31-12-2015 = 6 months So depreciation for the period = 39920*6month /12 months depreciation = 19960

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

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