Trotman Company had three intangible assets at the end of 2019 (end of the accounting year): Computer software and website development technology purchased on January 1, 2018, for $71,000. The technology is expected to have a four-year useful life to the company with no residual value. A patent purchased from Ian Zimmer on January 1, 2019, for a cash cost of $30,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life. A trademark purchased for $13,000 on November 1, 2019. Management decided the trademark has an indefinite life. Required: 1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019. 2b. Show how the three intangible assets should be reported on the balance sheet for 2019. Please see pics, I'm not sure why it's incomplete.
Trotman Company had three intangible assets at the end of 2019 (end of the accounting year): Computer software and website development technology purchased on January 1, 2018, for $71,000. The technology is expected to have a four-year useful life to the company with no residual value. A patent purchased from Ian Zimmer on January 1, 2019, for a cash cost of $30,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life. A trademark purchased for $13,000 on November 1, 2019. Management decided the trademark has an indefinite life. Required: 1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019. 2b. Show how the three intangible assets should be reported on the balance sheet for 2019. Please see pics, I'm not sure why it's incomplete.
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 4RP
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Question
Trotman Company had three intangible assets at the end of 2019 (end of the accounting year):
- Computer software and website development technology purchased on January 1, 2018, for $71,000. The technology is expected to have a four-year useful life to the company with no residual value.
- A patent purchased from Ian Zimmer on January 1, 2019, for a cash cost of $30,000. Zimmer had registered the patent with the U.S. Patent and Trademark Office five years ago. Trotman intends to use the patent for its remaining life.
- A trademark purchased for $13,000 on November 1, 2019. Management decided the trademark has an indefinite life.
Required:
1. Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts.
2a. Show how the expenses related to the three intangible assets should be reported on the income statement for 2019.
2b. Show how the three intangible assets should be reported on the balance sheet for 2019.
Please see pics, I'm not sure why it's incomplete.
Transcribed Image Text:Req1
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Req 1
Req 2A
Req 2B
Compute the amortization of each intangible at December 31, 2019. The company does not use contra-accounts.
Amortization
Technology
$
17,750
Patent
2$
2,000
Trademark
< Req 1
Req 2A
>
Req 2A
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Req 1
Req 2A
Req 2B
Show how the expenses related to the three intangible assets should be reported on the income statement for 2019.
TROTMAN COMPANY
Income Statement for 2019 (Partial)
Operating expenses:
Amortization expense
$
19,750
< Req 1
Req 2B >
Transcribed Image Text:Req 1
Req 2A
Req 2B
Show how the three intangible assets should be reported on the balance sheet for 2019.
TROTMAN COMPANY
Balance Sheet
December 31, 2019 (Partial)
Intangibles:
Technology
$
35,500
Patent
28,000
Trademark
13,000
$
76,500
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