Account for intangible assets.( LO 3)
Larkin Company had the following balances in its intangible asset accounts at the beginning of the year. The trademarks have a remaining useful life of 5 years, and the copyright has a remaining useful life of 10 years.
|
Trademarks |
$85,000 |
|
Copyright |
50,000 |
|
Goodwill |
80.000 |
Transactions during the year:
1. At the beginning of the year, Larkin filed for a new trademark. The costs totaled $40,000. Its useful life is estimated at 5 years.
2. Larkin incurred R&D costs of $30,000, related to new product development. No new products have been identified.
3. Larkin evaluated the goodwill for impairment and reduces its book value by $20,000.
4. Larkin successfully defended its copyrights in court. Fees totaled $10,000.
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 balance sheet at year-end.