Account for intangible assets (LO 3)
LB Company had the following balances in its intangible assets accounts at the beginning of the year. The patents have a remaining useful life of l0 years, and the copyright has a remaining useful life of 7 years.
|
Patents |
$35,000 |
|
Copyright |
21,000 |
|
Goodwill |
40,000 |
Transactions during the year:
1. At the beginning of the year, LB filed for a new patent. The costs totaled $20,000. Its useful life is estimated at 10 years.
2. LB incurred R&D costs of $60,000 related to new product development’ No new products have been identified.
3. LB evaluated the goodwill for impairment and reduced its book value by $2,000.
4. LB successfully defended one of its patents in court. Fees totaled $ 24,000.
Required
Show each of the transactions in the accounting equation, including any adjustments that would need to be made for the year-end financial statements. Then, prepare the intangible assets section of the balances sheet at year-end.