Track Town Co. had the following transactions involving intangible assets : Jan. 1 Purchased a patent for

Question:

Track Town Co. had the following transactions involving intangible assets:

Jan. 1 Purchased a patent for leather soles for $10,000 and estimated its useful life to be 10 years.

Apr. 1 Purchased a copyright for a design for $15,000 with a life left on the copyright of 25 years. The estimated remaining (economic) life of the copyright is five years.

July 1 Purchased a trademark at a cost of $50,000. The estimated economic life of the trademark is 25 years. However, conservatism suggests it should be written off in five years.

REQUIRED

1. Using the straight-line method, calculate the amortization of the patent, copyright, and trademark.

2. Prepare general journal entries to record the end-of-year amortizations.

Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...