How the intangible assets and goodwill should be presented

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Reference no: EM132746173

Question - The intangible assets reported by Gianni Corporation at June 30, 2014 follow: Copyright, #1 $ 48,000 Less: Accumulated amortization 24,000 Copyright #1, net 24,000 Trademark 54,000 Goodwill 125,000 Total $203,000 Copyright #1 was acquired on January 1, 2012 and has a useful life of four years. The company amortizes any copyright using straight-line method. The trademark was acquired on January 1, 2010 and is expected to have an indefinite life. The company has a December 31 year-end. The following cash transactions may have affected intangible assets and goodwill during 2014: July 1: Developed a new software, incurring $210,000 in research and $50,000 in development costs. The development phase ended on July 1. The product is expected to have a useful life of 20 years with double-declining-balance method of amortization. The software is unlikely to have any salvage value after its useful life. July 5: Paid $7,000 in legal costs to successfully defend the trademark against infringement by another company. Sep 1: Paid $60,000 to a popular hockey player to appear in commercials advertising the company's products. The commercials will air in early September.

Oct 1: Acquired another copyright (Copyright #2) for $180,000. The new copyright has a useful life of three years.

Dec 31: Determined the recoverable amount of the trademark and goodwill to be $65,000 and $90,000, respectively. There was no indication that any other assets were impaired.

Required - [Show all the calculations to receive full grades]

1. Prepare journal entries to record the transactions in 2014.

2. Show how the intangible assets and goodwill should be presented on the statement of financial position as at December 31, 2014.

Reference no: EM132746173

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