The intangible assets and goodwill reported by Ghani Corporation at December 31, 2011, follow:

The copyright (#1) was acquired on January 1, 2010, and has a useful life of three years. The trademark was acquired on January 1, 2008, and is expected to have an indefinite life. The company has a December 31 year end.
The following cash transactions may have affected intangible assets and goodwill during 2012:
Jan. 5 Paid $7,000 in legal costs to successfully defend the trademark against infringement by another company.
July 1 Developed a new product, incurring $210,000 in research and $50,000 in development costs. The development phase ended on July 1. The product is expected to have a useful life of 20 years.
Sept. 1 Paid $60,000 to a popular hockey player to appear in commercials advertising the company's products. The commercials will air in early September.
Oct. 1 Acquired another copyright (Copyright #2) for $180,000. The new copyright has a useful life of three years.
Dec. 31 Determined the recoverable amount of the trademark and goodwill to be $65,000 and $90,000, respectively. There was no indication that any other assets were impaired.
Instructions
(a) Prepare journal entries to record the transactions.
(b) Prepare any adjusting journal entries required at December 31.
(c) Show the presentation of the intangible assets and goodwill on the statement of financial position at December 31 ,2012.

Transcribed Image Text:

Copyrights (#1) Less: Accumulated amortization Trademark Goodwill Total $36,000 $ 12,000 54,000 125,000 $191,000