Make the entries as of december

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Question - Recording and Amortization of Intangibles

Powerglide Company, organized in 2009, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2010.

1/2/10

Purchased patent (8-year life)

$380,000

4/1/10

Purchased goodwill (indefinite life)

360,000

7/1/10

Purchased franchise with 10-year life; expiration date 7/1/20

450,000

8/1/10

Payment of copyright (5-year life)

156,000

9/1/10

Research and development costs

215,000



$1,561,000

(a) Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.

(b) Make the entries as of December 31, 2010, recording any necessary amortization and reflecting all balances accurately as of that date. (Use straight-line amortization.)

(c) Show balance of intangibles as of December 31, 2010.

Reference no: EM131817467

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