Trotman Company had three intangible assets at the end of 2019 (end of the accounting year): Computer

Question:

Trotman Company had three intangible assets at the end of 2019 (end of the accounting year):

Computer software and website development technology purchased on January 1, 2018, for $70,000. The technology is expected to have a four-year useful life to the company with no residual value.

A patent purchased from Ian Zimmer on January 1, 2019, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life.

A trademark purchased for $13,000 on November 1, 2019. Management decided the trademark has an indefinite life.

Required:

1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts.

2. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2019.

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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