Reference no: EM132066569

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

a. Computer software and Web development technology purchased on January 1, 2011, for $71,000. The technology is expected to have a four-year useful life to the company.

b. A patent purchased from Ian Zimmer on January 1, 2011, for a cash cost of $15,000. 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 $26,000 on November 1, 2012. Management decided to capitalize the $26,000 as an intangible asset with 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. Assume the company uses straight-line method.

3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for 2012.