Question

Midtown Telecom purchased Samson Wireless Enterprises for $480,000 cash plus a $720,000 note payable. Samson's book value of assets was $700,000. Samson's market value of assets and liabilities was $1,100,000 and $520,000, respectively.

Apr. 1

Paid $400,000 to acquire a patent. Midtown believes the patent's useful life will be 10 years.

Oct. 1

Paid $820,000 for the trademark, "Fast as Lightening," with a useful life of 20 years.

Dec. 31

Recorded amortization expense (separately) for the patent and trademark.

Answer 1