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How much amortization should the company record

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Reference no: EM132965384

Jimmy Dean Rodriguez Sausage company acquired Eggs Danedict for $500,000. Eggs Danedict holds a patent on an egg collecting machine that has a book value of $2,500 but is valued by Jimmy Dean Rodriguez at $30,000, with an expected life of five years. In addition the brand name of Eggs Danedict was valued at $75,000. The registration of the trademark is scheduled to expire in 15 years, but Jimmy Dean Rodriguez believes the benefits of the brand name will be useful for many years to come. The remaining net asset value attributable to separately identifiable tangible assets totaled $350,000.

Problem 1: How much amortization should the company record the first year after the acquisition?

Problem 2: How much should the patent be valued at on the balance sheet after the acquisition?

Reference no: EM132965384

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