need help on how to calculate this problem step by step, please. Information concerning Sure Corporation's intangible assets is as follows: On January 1, 2019, Sure signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $81,000. Of this amount, $21,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $45,600. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sure's revenue from the franchise for 2019 was $800,000. Sure estimates the useful life of the franchise to be 5 years. Sure incurred $69,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $17,440. Sure estimates that the useful life of the patent will be 10 years. A trademark was purchased from Walton Company for $41,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $11,500 were paid on July 1, 2019. Sure estimates that the useful life of the trademark will be 25 years from the date of acquisition. Required: 1. Prepare a schedule showing the intangible assets section of Sure's balance sheet at December 31, 2019. Round final answers to the nearest dollar.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

See similar textbooks

Related questions

Question

I need help on how to calculate this problem step by step, please.

Information concerning Sure Corporation's intangible assets is as follows:

On January 1, 2019, Sure signed an agreement to operate as a franchisee of Rapid Copy Service Inc. for an initial franchise fee of $81,000. Of this amount, $21,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $15,000 each beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 2, 2019, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $45,600. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Sure's revenue from the franchise for 2019 was $800,000. Sure estimates the useful life of the franchise to be 5 years.
Sure incurred $69,000 of experimental and development costs in its laboratory to develop a patent, which was granted on January 2, 2019. Legal fees and other costs associated with registration of the patent totaled $17,440. Sure estimates that the useful life of the patent will be 10 years.
A trademark was purchased from Walton Company for $41,000 on July 1, 2016. Expenditures for successful litigation in defense of the trademark totaling $11,500 were paid on July 1, 2019. Sure estimates that the useful life of the trademark will be 25 years from the date of acquisition.

Required:

1. Prepare a schedule showing the intangible assets section of Sure's balance sheet at December 31, 2019. Round final answers to the nearest dollar.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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