Trotman Company had three intangible assets at the end of 2016 (end of the accounting year);...

Transcribed Image Text:

Trotman Company had three intangible assets at the end of 2016 (end of the accounting year); a. Computer software and Web development technology purchased on January 1, 2015, for $70,000. The technology is expected to have a four-year useful ile to the company. b. A patent purchased from lan Zimmer on January 1, 2016, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago c. A trademark purchased for $13,000 on November 1, 2016. Management decided the trademark has an indefinite life. Required: 1. Compute the acquisition cost of each intangible asset. Technology Patent Trademark Acquisition cost 2. Compute the amortization of each intangible at December 31, 2016. The company does not use contra-accounts. (Assume the company uses straight-line method) Do not runt yo intermediate calculations.) Amortization 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2016. TROTMAN COMPANY Income Statement for 2016 (Partial) Operating expenses: Intangibles TROTMAN COMPANY Balance Sheet December 31, 2016 (Partial) Trotman Company had three intangible assets at the end of 2016 (end of the accounting year); a. Computer software and Web development technology purchased on January 1, 2015, for $70,000. The technology is expected to have a four-year useful ile to the company. b. A patent purchased from lan Zimmer on January 1, 2016, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago c. A trademark purchased for $13,000 on November 1, 2016. Management decided the trademark has an indefinite life. Required: 1. Compute the acquisition cost of each intangible asset. Technology Patent Trademark Acquisition cost 2. Compute the amortization of each intangible at December 31, 2016. The company does not use contra-accounts. (Assume the company uses straight-line method) Do not runt yo intermediate calculations.) Amortization 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2016. TROTMAN COMPANY Income Statement for 2016 (Partial) Operating expenses: Intangibles TROTMAN COMPANY Balance Sheet December 31, 2016 (Partial)

Answer rating: 100% (QA)

1 Technology Patent Trademark 2 Technology Patent Trademark Amortiza... View the full answer