Answer:
Acquisition cost
a. Patent: $6,000
b. Trademark: $4,000
c. Computer licensing rights: $42,000
2. Amortization for current year
a. Patent: $500
Annual Amortization charge = Cost / Estimated life = $6,000 / 12 = $500
b. Trademark: $0. Since it has an indefinite life.
c. Computer licensing rights: $7,000
Annual Amortization charge = Cost / Useful life = $42,000 / 6 = $7,000
3. Balance Sheet (Partial)
Assets
Intangible Assets=$44,500
($6,000 + $4,000 + $42,000 - $500 - $7,000)
Income Statement (Partial)
Under Continuing operations
Amortization expense=$7,500
