The intangible assets and goodwill reported by Ip Corp. at December 31, 2011, follow: The patent was

The intangible assets and goodwill reported by Ip Corp. at December 31, 2011, follow:

intangible assets and goodwill reported by Ip Corp. at">

The patent was acquired in January 2010 and has a useful life of 10 years. Copyright #1 was acquired in January 2007 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets and goodwill during 2012:
Jan. 2 Paid $22,500 in legal costs to successfully defend patent #1 against infringement by another company. Determined that the revised annual amortization for this patent will be $9,812.
July 1 Developed a new product, incurring $220,000 in research costs and $60,000 in development costs. The development phase ended on July 1. The useful life of the new product is equal to 20 years.
Sept. 1 Paid $11,000 to an Olympic rower to appear in commercials advertising the company's products. The commercials will air in September.
Oct. 1 Acquired a second copyright for $16,000. Copyright #2 has a useful life of five years.
Dec. 31 Determined the recoverable amount of the goodwill to be $175,000. There was no indication that any intangible assets were impaired.
Instructions
(a) Prepare the journal entries to record the above transactions.
(b) Prepare any adjusting journal entries required at December 31, the company's year end.
(c) Show the presentation of the intangible assets and goodwill on the statement of financial position at December 31, 2012.

Transcribed Image Text:

Patent #1 Less: Accumulated amortization Copyright #1 $70,000 14,000 $48,000 28,800 $ 56,000 Less: Accumulated amortization Goodwill Total 19,200 210,000 $285,200