ACC 557 $5 Price are final (answer must be correct)

Problem 9-7A (Part Level Submission)

The intangible assets section of Glover Company at December 31, 2013, is presented below.

Patents ($61,400 cost less $6,140 amortization)		$55,260
Franchises ($36,200 cost less $14,480 amortization)		21,720
Total		$76,980

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 $40,860 legal costs to successfully defend the patent against infringement by another company.
Jan.–June		Developed a new product, incurring $137,570 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 $55,760 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 $135,000. The franchise has a useful life of 50 years.

Warning

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Prepare journal entries to record the 2014 amortization expense.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To record patents amortization.)
Dec. 31	[removed]	[removed]	[removed]
	[removed]	[removed]	[removed]
	(To record franchises amortization.)