Solution-Compute the acquisition cost of each intangible

Compute the acquisition cost of each intangible asset

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Reference no: EM132359672

Question

Trotman Company had three intangible assets at the end of 2013 (end of the accounting year):

a. Computer software and Web development technology purchased on January 1, 2012, for $72,000. The technology is expected to have a four-year useful life to the company.

b. A patent purchased from Ian Zimmer on January 1, 2013, for a cash cost of $21,000. 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 $25,000 on November 1, 2013. Management decided to capitalize the $25,000 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, 2013. 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 2013.

Reference no: EM132359672

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Compute the acquisition cost of each intangible asset

Reference no: EM132359672

Reference no: EM132359672

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