Question

Exercise 12-06

Blossom Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.

1/2/20		Purchased patent (8-year life)		$352,800
4/1/20		Purchase goodwill (indefinite life)		351,000
7/1/20		Purchased franchise with 10-year life; expiration date 7/1/30		431,000
8/1/20		Payment of copyright (5-year life)		157,200
9/1/20		Research and development costs		221,000
				$1,513,000

Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

SHOW LIST OF ACCOUNTS

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Make the entry as of December 31, 2020, recording any necessary amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

SHOW LIST OF ACCOUNTS

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LINK TO TEXT

Reflect all balances accurately as of December 31, 2020.

Use straight-line amortization
select an intangible asset PatentsGoodwillCopyrightsFranchisesResearch and development costs		$enter a dollar amount
select an intangible asset PatentsCopyrightsFranchisesResearch and development costsGoodwill		$enter a dollar amount
select an intangible asset CopyrightsFranchisesGoodwillResearch and development costsPatents		$enter a dollar amount
select an intangible asset GoodwillPatentsFranchisesCopyrightsResearch and development costs		$enter a dollar amount

Answer 1

1
Account Titles and Explanation	Debit	Credit
Patents	352800
Goodwill	351000
Franchises	431000
Copyrights	157200
Research and Development Expense	221000
Intangible Assets		1513000
2
Account Titles and Explanation	Debit	Credit
Amortization Expense	78750
Patents		44100	=352800/8
Franchise		21550	=431000/10*6/12
Copyright		13100	=157200/5*5/12
3
Use straight-line amortization
Patents	308700		=352800-44100
Goodwill	351000
Franchise	409450		=431000-21550
Copyright	144100		=157200-13100