TLM Technologies had these transactions related to intangible assets during 2019. Jan. 2 Purchased a patent...
TLM Technologies had these transactions related to intangible assets during 2019.
| Jan. 2 | Purchased a patent from Luna Industries for $193,000. The remaining legal life of the patent is 15 years, and TLM expects the patent to be useful for 8 years. |
| Jan. 5 | Paid legal fees in a successful legal defense of the patent of $93,000. |
| June 29 | Registered a trademark with the federal government. Registration costs were $7,000. TLM expects to use the trademark indefinitely. |
| Sept. 2 | Paid research and development costs of $476,800. |
Required:
| 1. Prepare the journal entries necessary to record the transactions. | |
| 2. Prepare the entries necessary to record amortization expense for the intangible assets. | |
| 3. What is the balance of the intangible assets at the end of 2019? |
Homework Answers
| 1 | ||||
| Jan. 2 | Patents | 193000 | ||
| Cash | 193000 | |||
| Jan. 5 | Patents | 93000 | ||
| Cash | 93000 | |||
| June 29 | Trademark | 7000 | ||
| Cash | 7000 | |||
| Sept. 2 | Research and development expense | 476800 | ||
| Cash | 476800 | |||
| 2 | ||||
| Dec 31 | Amortization expense | 35750 | =(193000+93000)/8 | |
| Patents | 35750 | |||
| 3 | ||||
| Patents | 250250 | =193000+93000-35750 | ||
| Trademark | 7000 | |||
| Total intangible assets | 257250 |
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