Transactions during 2011 of the newly organized Menlove Corporation included the following:

Jan. 2 Paid legal fees of $15,000 and stock certificate costs of $8,300 to complete organization of the corporation.

15 Hired a clown to stand in front of the corporate office for two weeks and hand out pamphlets and candy to create goodwill for the new enterprise. Clown cost, $1,000; pamphlets and candy, $500.

Apr. 1 Patented a newly developed process with costs as follows:

Legal fees to obtain patent . . . . . . . . . . . . . . . . . . . . . . . . . . $42,900

Patent application and licensing fees . . . . . . . . . . . . . . . . . . 6,350

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $49,250

It is estimated that in six years other companies will have developed improved processes, making the Menlove Corporation process obsolete.

May 1 Acquired both a license to use a special type of container and a distinctive trademark to be printed on the container in exchange for 600 shares of Menlove Corporation no-par common stock selling for $50 per share. The license is worth twice as much as the trademark, both of which may be used for six years.

July 1 Constructed a shed for $131,000 to house prototypes of experimental models to be developed in future research projects.

Dec. 31 Incurred salaries for an engineer and chemist involved in product development totaling $175,000 in 2011.

Instructions:

1. Give journal entries to record the preceding transactions. (Ignore amortization of intangible assets.)

2. Present the intangible assets section of Menlove Corporation’s balance sheet at December 31, 2011.