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 $2,700. When purchased, the patent had an estimated life of 9 years. b. A trademark was registered with the federal government for $5,500. Management estimated that the trademark could be worth as much as $150,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $50,000. The rights are expected to have a five-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.)

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

A patent purchased this year from Miller Co. on January 1 for a cash cost of $2,700. When purchased, the patent had an estimated life of 9 years.

A trademark was registered with the federal government for $5,500. Management estimated that the trademark could be worth as much as $150,000 because it has an indefinite life.

Computer licensing rights were purchased this year on January 1 for $50,000. The rights are expected to have a five-year useful life to the company.

Compute the acquisition cost of each intangible asset.

patent

Trademark

Licensing Right

Compute the amortization of each intangible for the current year ended December 31.

Patent

Trademark

Licensing Right

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 had three intangible assets at the end of the current year:

Explanation / Answer

Compute the acquisition cost of each intangible asset.

patent - the patent is acquired at $2700 so acquisition cost is $2700

Trademark - $5500

Licensing Right - $50000

Compute the amortization of each intangible for the current year ended December 31.

Patent - $2700/9 = $300

Trademark :- the amortisation cost of trademark here is calculated with the help of Ind As 36 of Impairment but for this we need to calculate the Recoverable amount and value to use but here it is not available so we can not calculate it here the value of amortisation

Licensing Right :- $50000/5 = $10000

3.

Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.

In this the cost of amortisation or impairment loss is shown in the P&l or OCI and then to capital reserve

and these assets are shown in the NCA that is non current assets in the balance sheet as per schedule 3 of division 2

Compute the acquisition cost of each intangible asset.

patent - the patent is acquired at $2700 so acquisition cost is $2700

Trademark - $5500

Licensing Right - $50000

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