Question: Hargrove Dynamics Inc had the following balances in its intangible

Hargrove Dynamics, Inc., had the following balances in its intangible asset accounts at the beginning of the year:
Patents .......... $65,000
Copyrights ....... 42,000
Goodwill ....... 67,500
The patents have a remaining useful life of 10 years, and the copyright has a remaining useful life of 12 years. Transactions during the year were as follows:
a. At the beginning of the year, Hargrove filed for a new patent. The costs totaled $35,000. Its useful life is estimated at 10 years.
b. Hargrove incurred R&D costs of $45,000, related to new product development. No new products have been identified.
c. Hargrove evaluated the goodwill for impairment and reduced its book value by $2,500.
d. Hargrove successfully defended its patents in court. Fees totaled $13,500.

Show each of the transactions in the accounting equation, including any adjustments that would need to be made for the year-end financial statements. Then prepare the intangible assets section of the balance sheet at year end.

Sale on SolutionInn
  • CreatedSeptember 01, 2014
  • Files Included
Post your question