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Johnson company's balance sheet section with intangible assets at 12/31/2012 is presented below. |
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cost |
less amortization |
net |
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Patents |
$35,000 |
$3,000 |
$32,000 |
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Copyrights |
$20,000 |
$6,000 |
$14,000 |
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Total |
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$46,000 |
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The patent for fire retardent : |
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Acquired |
1/15/2012 |
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Use ful life |
24 |
years |
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The copyright for publishing the operating procedures manual : |
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Acquired |
1/15/2012 |
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Use ful life |
16 |
years |
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Some Paid cash transactions with potential impact on intangible assets follow : |
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Attorneys fees for infringement defense |
1/15/2013 |
$20,000 |
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R and D for the new retardent sprayer |
Jan-June |
$100,000 |
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Product patent received |
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6/1/2013 |
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Useful life |
(same as legal life) |
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Patent total legal and related costs |
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$6,000 |
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Harry Onfire Celebrity endorsement cost |
Sept-Oct |
$50,000 |
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A new copyright for making antidotes to the retardent was purchased from Burnemnot |
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Acquired |
10/1/2013 |
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Use ful life |
20 |
years |
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Cost |
$60,000 |
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Legal life |
20 |
years |
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Franchise and license were obtained for the new products from Bradpittster company |
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Acquired |
10/1/2013 |
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Use ful life |
10 |
years |
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Cost |
$85,000 |
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Small division of Angelojolie Company (distribution chain) was purchased |
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Acquired |
12/1/2013 |
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Price |
$400,000 |
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fair value determined to be |
$250,000 |
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Instructions
(a) Prepare the correct journal entries to record the transactions.
(b) Prepare the correct journal entries to record the 2013 amortization expense.
(c) Prepare the balance sheet intangible assets section December 31, 2013.
(d) Prepare a note to the financial statements on Johnson Company's intangible assets as of December 31, 2013.