Question

Given the following account balances at year end, how much are total intangible assets on the balance sheet of Alisha Enterprises? Sales revenue, $45,000,000; Cash, $1,500,000; Accounts receivable, $3,000,000; Land, $15,000,000; Equipment, $25,000,000; Franchises, $500,000; Trademarks, $1,700,000; and Goodwill, $2,800,000. The company also paid $1,500,000 for research & development during the current year.

Answer 1

The total intangible assets on the balance sheet of Alisha Enterprises are $5,000,000. This total comes from adding the balances of franchises, trademarks, and goodwill. Research & development costs are not generally classified as intangible assets.

Step-by-step explanation:

To calculate the total intangible assets on the balance sheet of Alisha Enterprises, we must sum up the balances of the individual intangible assets listed. The intangible assets given are franchises at $500,000, trademarks at $1,700,000, and goodwill at $2,800,000.

The total value of intangible assets is therefore:

• Franchises: $500,000
• Trademarks: $1,700,000
• Goodwill: $2,800,000

Adding these together, we get:

Franchises + Trademarks + Goodwill = $500,000 + $1,700,000 + $2,800,000 = $5,000,000

It’s also important to note the research & development (R&D) expenditure of $1,500,000 mentioned does not typically get classified as an intangible asset because R&D is often expensed in the period it is incurred unless it meets certain criteria to be capitalized. Considering the information provided, it’s likely that this expense isn't counted as part of Alisha Enterprises' intangible assets.