The intangible assets section of Glover Company at December 31. 2006. is presented below. The patent was
Question:
The intangible assets section of Glover Company at December 31. 2006. is presented below.
The patent was acquired in January 2006 and has a useful life of 10 years The copyright was acquired in January 2003 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2007.
Jan. 2 Paid $36,000 legal costs to successfully defend the patent against infringement by another company.
Jan.-June Developed a new product, incurring S14().00() in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.
Sept. 1 Paid $75,000 to a quarterback to appear in commercials advertising the company's products. The commercials will air in September and October.
Oct. 1 Acquired a copyright for $80,000. The copyright has a useful life of 50 years.
Instructions
(a) Prepare journal entries to record the transactions above.
(b) Prepare journal entries to record the 2007 anion i/ation expense for intangible assets.
(c) Prepare the intangible assets section ol the balance sheet at December 31. 2007.
(d) I 111 ! r-, l> Prepare the note to the Financials on Glover's intangibles as of December 31.
2007.
Step by Step Answer:
Financial Accounting Text Only
ISBN: 9780006575405
5th Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel