Question

Marin 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 $780,000 cash for Old Master. At the time, Old Master’s balance sheet reported assets of $670,000 and liabilities of $200,000 (thus owners’ equity was $470,000). 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 $8,000 and a copyright on some instructional books with a fair value of $38,400. 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.

(a)

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

MARIN 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
enter a balance sheet item					$enter a dollar amount
enter a balance sheet item					enter a dollar amount
enter a balance sheet item					enter a dollar amount
select a closing section name Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentRevenuesStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders' Equity					$enter a total amount for this section

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

Amortization expense

$enter Amortization expense in dollars

Answer 1

Answer:

Purchase price		$       780000
Fair value of assets	$      830000
Less: Fair value of liabilities	$      200000
Fair value of net assets		$       630000
Goodwill		$       150000
1
Intangibles Section of Balance Sheet
December 31, 2019
Goodwill	$      150000
Copyrights	$        38880	38400-480
Trade Names	$          8000
Total Intangible Assets	$      196880
2
Amortization expense	$             480	38400/40*6/12