Question

Sheridan Company, organized in 2019, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2020.

1/2/20 Purchased patent (8-year life) $348,800
4/1/20 Purchase goodwill (indefinite life) 346,000
7/1/20 Purchased franchise with 10-year life; expiration date 7/1/30 426,000
8/1/20 Payment of copyright (5-year life) 151,200
9/1/20 Research and development costs 216,000

Required:
Prepare the necessary entry to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles.

Answer 1

Dr Patent 348,800

Dr Goodwill 346,000

Dr Franchise 426,000

Dr Copyright 151,200

Dr Research and development 216,000

Cr Intangible assets 1,488,000

Step-by-step explanation:

We are only given the sates when the intangibles are recorded, since we are not given an specific date for separating the accounts, recoding any amortization is not possible.