ACC 557 Problem 9-7A
ACC 557 Problem 9-7A
Problem 9-7A (Part Level Submission)
The intangible assets section of Glover Company at December 31, 2013, is presented below.
| Patents ($77,200 cost less $7,720 amortization) | $69,480 | |
| Franchises ($39,900 cost less $15,960 amortization) | 23,940 | |
| Total | $93,420 |
The patent was acquired in January 2013 and has a useful life of 10 years. The franchise was acquired in January 2010 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2014.
| Jan. 2 | Paid $53,100 legal costs to successfully defend the patent against infringement by another company. | |
| Jan.–June | Developed a new product, incurring $138,260 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life. | |
| Sept. 1 | Paid $59,240 to an extremely large defensive lineman to appear in commercials advertising the company’s products. The commercials will air in September and October. | |
| Oct. 1 | Acquired a franchise for $126,000. The franchise has a useful life of 50 years. |
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ACC 557 Problem 9-7A
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