Gill Company, organized in 2017, has the following transactions related to intangible assets.1/2/17 Purchased patent (5-year life) $385,0004/1/17 Goodwill purchased (indefinite life) 360,0007/1/17 12-year franchise; expiration date 7/1/2,029 408,0009/1/17 Research and development costs 176,000a. Prepare the necessary entries to record these intangibles. All costs incurred were for cash. Make the adjusting entries as of December 31, 2017, recording any necessary amortization. b. Calculate ending balances as at 12/31/17.

Dr Amortization Expense $94,000 ($77k + $15k)

Cr Accumulated Amortization - Patents      $77,000

Cr Accumulated Amortization - Franchise   $17,000

The ending balance are given as under:

Patents ($385k - $77k)                       $308,000

Goodwill Purchased                           $360,000

Franchise ($408k - $17)                      $391,000

Research and development costs     $176,000

Explanation:

The amortization expense can be calculated as under:

Amortization Expense = Cost / Useful Life

Here

Cost of the patent is $385,000 and its useful life is 5 years.

By putting values, we have:

Amortization Expense = $385,000 / 5 Years = $77,000

Now we will calculate the amortization expense of the franchise by simply putting values in the above amortization formula. Here the cost of the franchise is $408,000 and its useful life is 12 years.

By putting values, we have:

Amortization Expense = $408,000 / 12 Years = $34,000

This franchise was purchased on first July, which means that the amortization must be for 6 months which is half of the complete year amortization.

So

Amortization for 6 months = $34,000 * 6 / 12 = $34,000 * 1 / 2 = $17,000

Double Entry

Now the double entry of $77,000 and $17,000 amortization would be recognized as under:

Dr Amortization Expense $94,000 ($77k + $15k)

Cr Accumulated Amortization - Patents      $77,000

Cr Accumulated Amortization - Franchise   $17,000

The ending balance are given as under:

Patents ($385k - $77k)                       $308,000

Goodwill Purchased                           $360,000

Franchise ($408k - $17)                      $391,000

Research and development costs     $176,000

explore some of these tourist attractions

the metropolitan museum of art. source: anton_ivanov / shutterstock.

central park. source: gagliardiphotography / shutterstock.

national 9/11 memorial and museum.

empire state building.

statue of liberty.

the museum of modern art (moma)

rockefeller center.

brooklyn bridge.

explanation: