Answer:
ending balance for patents = $395,000
ending balance for goodwill = $360,000
ending balance for franchise contract = $567,000
ending balance for research and development = $0
Explanation:
first we must calculate the amortization of the patents = carrying value / useful life = $474,000 / 6 years = $79,000 per year
ending balance for patents = $474,000 - $79,000 = $395,000
US GAAP only allows private companies to amortize goodwill (10 years), but since Marigold is a corporation, then it cannot amortize goodwill.
we can amortize franchise contracts over the useful life:
$588,000 / 14 years = $42,000 per year, but only 6 months have passed, so amortization = $42,000 x 0.5 = $21,000
franchise ending balance = $588,000 - $21,000 = $567,000
research and development costs are expenses, they cannot be amortized, they have to be expensed and included in the income statement.
