Question

Trotman Company had three intangible assets at the end of 2013 (end of the accounting year):
a. Computer software and Web development technology purchased on January 1, 2012, for $70,000. The technology is expected to have a four-year useful life to the company.
b. A patent purchased from Ian Zimmer on January 1, 2013, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago.
c. An internally developed trademark registered with the federal government for $13,000 on November 1, 2013. Management decided the trademark has an indefinite life.

Required:
1. Compute the acquisition cost of each intangible asset.
2. Compute the amortization of each intangible at December 31, 2013. The company does not use contra-accounts.
3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2013.



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  • CreatedJuly 01, 2014
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