AB 116 WEEK 3 Problem 10 7A
The intangible assets section of Sappelt Company at December 31 2014 is presented below.
Patents ($61,600 cost less $6,160 amortization) $55,440
Franchises ($44,600 cost less $17,840 amortization) 26,760
Total $82,200
The patent was acquired in January 2014 and has a useful life of 10 years. The franchise was acquired in January 2011 and also has a useful life of 10 years. The following cash transactions may have affected intangible assets during 2015.
Jan. 2 Paid $21,240 legal costs to successfully defend the patent against infringement by another company.
Jan.-June Developed a new product, incurring $149,710 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 $51,940 to an extremely large defensive lineman to appear in commercials advertising the company- products. The commercials will air in September and October.
Oct. 1 Acquired a franchise for $142,000. The franchise has a useful life of 50 years.
USA 
India