The Family Company was expanding, and as a result they engaged in the following activities beginning in 2020: a. Paid $30,000 to the Major League Ballpark to have the Family name displayed on the billboard for three years. b. Purchased a franchise for $20,000 to operate trolley services around the city for tourists. The trolley service is expected to be decommissioned in 4 years due to the maintenance costs, there is hope that it will remain in service. c. Purchased a patent for $45,000. The patent was originally filed in 2015. d. The owner of the patent was a well known inventor and author who sold Family the rights to his novel in exchange for 5,000 shares of stock. The stock has a $5 par value and is currently selling for $25 per share. The novel is expected to sell 1,000,000 copies in the next 2 years. Required: Prepare the journal entries to record the amortization of the intangible assets for 2020. Amortize over their legal life unless otherwise noted.
The Family Company was expanding, and as a result they engaged in the following activities beginning in 2020: a. Paid $30,000 to the Major League Ballpark to have the Family name displayed on the billboard for three years. b. Purchased a franchise for $20,000 to operate trolley services around the city for tourists. The trolley service is expected to be decommissioned in 4 years due to the maintenance costs, there is hope that it will remain in service. c. Purchased a patent for $45,000. The patent was originally filed in 2015. d. The owner of the patent was a well known inventor and author who sold Family the rights to his novel in exchange for 5,000 shares of stock. The stock has a $5 par value and is currently selling for $25 per share. The novel is expected to sell 1,000,000 copies in the next 2 years. Required: Prepare the journal entries to record the amortization of the intangible assets for 2020. Amortize over their legal life unless otherwise noted.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 1BD
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Question
The Family Company was expanding, and as a result they engaged in the following activities beginning in 2020:
| a. | Paid $30,000 to the Major League Ballpark to have the Family name displayed on the billboard for three years. |
| b. | Purchased a franchise for $20,000 to operate trolley services around the city for tourists. The trolley service is expected to be decommissioned in 4 years due to the maintenance costs, there is hope that it will remain in service. |
| c. | Purchased a patent for $45,000. The patent was originally filed in 2015. |
| d. | The owner of the patent was a well known inventor and author who sold Family the rights to his novel in exchange for 5,000 shares of stock. The stock has a $5 par value and is currently selling for $25 per share. The novel is expected to sell 1,000,000 copies in the next 2 years. |
Required:
| Prepare the |
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