Question

Figg Company, with a fiscal year ending December 31, acquired three intangible assets during 2015. For each of the following transactions, indicate the accounts affected and the amounts and direction of the effects (+ for increase, – for decrease, and N for no effect) on the accounting equation. Use the following headings:
a. On January 1, 2015, the company purchased a patent from Ullrich Ltd. for $ 6,000 cash. Ullrich had developed the patent and registered it with the Canadian Intellectual Property Office on January 1, 2010.
b. On January 1, 2015, the company purchased a copyright for a total cash cost of $ 12,000; the remaining legal life was 25 years. Company executives estimated that the copyright would have no value by the end of 20 years.
c. The company purchased another company in January 2015 at a cash cost of $ 130,000. Included in the purchase price was $ 30,000 for goodwill; the balance was for plant, equipment, and fixtures (no liabilities were assumed).
d. On December 31, 2015, the company amortized the patent over its remaining legal life.
e. On December 31, 2015, the company amortized the copyright over the appropriate period.


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  • CreatedAugust 04, 2015
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