Janes Company provided the following information on intangible assets: A patent was purchased from the Lou Company for $950,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $400,000 when Lou sold it to Janes. During 2021, a franchise was purchased from the Rink company for $550,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase. Janes incurred research and development costs in 2021 as follows:   Materials and supplies                 $145,000 Personnel                                         185,000 Indirect costs                                     65,000       Total                                            $395,000   Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years. Required: Prepare a schedule showing the intangible asset section of Janes’s December 31,2021, balance sheet. Partial Balance Sheet December 31, 2021 Intangible assets: ______________                             $_________________ ______________                              __________________ ______________                              __________________ Total intangibles

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...
icon
Related questions
Question

Janes Company provided the following information on intangible assets:

  1. A patent was purchased from the Lou Company for $950,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou’s accounting records at a net book value of $400,000 when Lou sold it to Janes.
  2. During 2021, a franchise was purchased from the Rink company for $550,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase.
  3. Janes incurred research and development costs in 2021 as follows:

 

Materials and supplies                 $145,000

Personnel                                         185,000

Indirect costs                                     65,000

      Total                                            $395,000

 

  1. Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years.

Required:

  1. Prepare a schedule showing the intangible asset section of Janes’s December 31,2021, balance sheet.

Partial Balance Sheet

December 31, 2021

Intangible assets:

______________                             $_________________

______________                              __________________

______________                              __________________

Total intangibles                               $_________________ 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Accounting for Intangible assets
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage