A. The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,000,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,700,000. B. Included in the assets purchased from Heinrich was a patent valued at $90,000. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for 8 moreyears; C.UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $350,000. The contractual life of the franchise is 10 years.

A. The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $3,000,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,700,000. B. Included in the assets purchased from Heinrich was a patent valued at $90,000. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for 8 moreyears; C.UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $350,000. The contractual life of the franchise is 10 years.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

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The following information relates to the intangible assets of University Testing Services (UTS): On January 1, 2024, UTS completed the purchase of Heinrich Corporation for $2,796,000 in cash. The fair value of the net identifiable assets of Heinrich was $2,500,000. Included in the assets purchased from Heinrich was a patent valued at $103,950. The original legal life of the patent was 20 years; there are 12 years remaining, but UTS believes the patent will be useful for only nine more years. UTS acquired a franchise on July 1, 2024, by paying an initial franchise fee of $273,600. The contractual life of the franchise is 8 years. Required Record the year-end adjusting entry for amortization expense, if any, for the intangible assets at December 31, 2024. Prepare the intangible asset section of the December 31, 2024, balance sheet.
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