Question

Teal Mountain Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equipment and accessory stores. Magilke paid $850,000 cash for Old Master. At the time, Old Master’s balance sheet reported assets of $630,000 and liabilities of $190,000 (thus owners’ equity was $440,000). The fair value of Old Master’s assets is estimated to be $830,000. Included in the assets is the Old Master trade name with a fair value of $7,000 and a copyright on some instructional books with a fair value of $33,600. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 40 years.

Prepare the intangible assets section of Teal Mountain Golf Inc. at December 31, 2019.

TEAL MOUNTAIN GOLF INC. Intangibles Section of Balance Sheet choose the accounting period December 31, 2019For the Year Ended December 31, 2019For the Month Ended December 31, 2019
Trade names					$
Copy rights					$
Goodwill					$
select a closing section name Total intangible assets					$

How much amortization expense is included in Teal Mountain income for the year ended December 31, 2019?

Amortization expense

$enter Amortization expense in dollars

Answer 1

Answer
Purchase price		$       850,000
Fair value of assets	$      830,000
Less: Fair value of liabilities	$      190,000
Fair value of net assets		$       640,000
Goodwill		$       210,000
1
Intangibles Section of Balance Sheet
December 31, 2019
Goodwill	$      210,000
Copyrights	$        33,180	33600-420
Trade Names	$          7,000
Total Intangible Assets	$      250,180
2
Amortization expense	$             420	33600/40*6/12