Trotman Company had three intangible assets at the end of 2013 (end of the accounting year): a.

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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.

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...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Financial Accounting

ISBN: 978-0078025556

8th edition

Authors: Robert Libby, Patricia Libby, Daniel Short

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