Section #1 Question 5 Accounting for Intangible Assets (10 marks) a. Rapid Research Company have just started a new research lab. Prepare the intangible asset section of their balance sheet on Dec 31, 2020. The company uses the straight line method to amortize its intangible assets. Use correct format and show your calculations. (8 marks) b. Calculate the total amount of expenses that would appear on the income statement for the transactions below. (2 marks) The following transactions occurred on Jan 1, 2020: (a) The company purchased franchise rights for $90,000 to for a branded research lounge. The franchise period is 6 years. (b) During the year, the company paid $14,000 in royalty fees to the parent company related to the franchise mentioned above. (c) The company purchased a patent for a new experimental drug for $40,000 with an estimated commercial life of 8 years. (d) The company paid research and development costs of $120,000 to try to develop their own patent. The research is expected to result in a new medication sometime in the next 5 years. (e) The company paid $230,000 to purchase a competing company. The physical assets of the company were valued at $90,000 The additional value is assumed to last for 8 years. End of Examination Metti Online Assessment 2010-2021 Need Help? Contact us: MI