Bishop Corporation had the following intangible assets on December 31,1999:

1. A patent was acquired from another company on January 1,1999, for $25,000. The patent had been registered with the U.S. Patent Office on January 1,1993. Assume that the legal life is the useful life.

2. On April 2, 1999, the company was successful in obtaining a patent. The legal fees paid to an outside law firm were $8,400. The development costs paid to engineers who were employees of Bishop were $75,000. The patent's estimated useful life is its legal life.

3. On July 1,1999, Bishop acquired all the assets net of the liabilities of Fargo Company. The identifiable net assets' market values at the time of purchase totaled $100,000. Bishop acknowledged the superior earnings and loyal customer following of Fargo Company. Therefore, Bishop and Fargo agreed on a total purchase price of $145,000. Any goodwill arising from the purchase is to be amortized over 40 years.

4. On December 31,1999 , Bishop paid a consulting firm $17,000 to develop a trademark. In addition, legal fees paid in connection with the trademark were $3,000. Assume a useful life of 20 years

a. Determine the amortization expense for 1999

b. Determine the book value of each of the intangible assets listed above.

Answer rating: 100% (QA)

a Amortization expense for 1999 Patent 25000 20 years 1250 Trademark 17000 20 years 850 b Book value ... View the full answer