In this simulation, you are asked to address questions related to intangible assets and similar costs. Prepare
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In this simulation, you are asked to address questions related to intangible assets and similar costs. Prepare responses to allparts.
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KWW Professional Simulation Time Remaining O hours 40 minutes Intangible Assets Unspit Split Horiz Spit Vertical Spreadsheet Calculator Exit Financial Statements Resources Directions Situation Journal Entries Measurement Argot Co., organized in 2011, provided you with the following information. 1. Purchased a franchise for $42,000 on July 1, 2011. The rights to the franchise will expire on July 1, 2019. 2. Incurred a net loss of $33,000 in 2011, including a state incorporation fee of $2,000 and related legal fees of organizing, $5,000. (All fees were incurred in 2011.) 3. Purchased a patent on January 2, 2012, for $80,000. It is estimated to have a 10-year life. 4. Costs incurred to develop a secret formula as of March 1, 2012, were $90,000. The secret fomula has an indefinite life. 5. On April 1, 2012, Argot Co. purchased a small manufacturing concern for $700,000. Goodwill recorded in the transaction was $180,000. 6. On July 1, 2012, legal fees for successful defense of the patent purchased on January 2, 2012, were $11,400. 7. Research and development costs incurred as of September 1, 2012, were $110,000. Moasurement, Financial Statements Resources Directions Situation Journal Entries Prepare the journal entries to record all the transactions related to the patent during 2012. Financial Statements Resources Journal Entries Directions Situation Measurement At December 31, 2012, an impairment test is performed on the franchise purchased in 2011. It is estimated that the net cash flows to be received from the franchise will be $25,000, and its fair value is $13,000. Compute the amount of impairment, if any, to be recorded on December 31, 2012. Directions Situation Journal Entries Measurement Financial Statements Resources What is the amount to be reported for intangible assets on the balance sheet at December 31, 2011? At December 31, 2012?
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Journal Entries January 2 2012 Patents 80000 Cash 80000 July 1 2012 Patents 11400 Cash 11400 Decembe...View the full answer
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