Trotman Company had three intangible assets at the end of 2012 (end of the accounting year): (a)

Question:

Trotman Company had three at the end of 2012 (end of the accounting year):
(a) Computer software and Web development technology purchased on January 1, 2011, for $70,000. The technology is expected to have a four-year useful life to the company.
(b) A patent purchased from Ian Zimmer on January 1, 2012, for a cash cost of $6,000. Zimmer had registered the patent with the U.S. Patent Office five years ago.
(c) An internally developed trademark registered with the federal government for $13,000 on November 1, 2012. Management decided the trademark has an indefinite life.
Required:
1. Compute the acquisition cost of each intangible asset.
2. Compute the amortization of each intangible at December 31, 2012. The company does not use contra-accounts.
3. Show how these assets and any related expenses should be reported on the and income statement for 2012.

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