Springer Company had three intangible assets at the end of 2014 (end of the accounting year): a. A copyright purchased on January 1, 2014, for a cash cost of $14,500. The copyright is expected to have a 10-year useful life to Springer. b. Goodwill of $65,000 from the purchase of the Hartford Company on July 1, 2013. c. A patent purchased on January 1, 2013, for $48,000. The inventor had registered the patent with the U. S. Patent Office on January 1, 2009.

1.$120,050

2.Copyright $1,450

Patent $3,000

3.Copyright $13,050

Goodwill $65,000

Patent $42,000

Explanation:

1.Computation of the acquisition cost of each intangible asset

SPRINGER COMPANY Income Statement for 2014(partial)

Operating expenses:

Amortization expense $4,450

SPRINGER COMPANY Balance SheetDecember 31, 2014 (partial)

Intangibles:

Copyright $13,050

Goodwill$65,000

Patent$42,000

Total $120,050

2. Computation of amortization expense of each intangible for the year ended December 31, 2014

Amortization on December 31, 2014 using thr straight-line method excluding residual value:

Amortization expense

Calculation for Copyright:

$14,500 × 1/10 = $1,450

We wont calculate for Goodwill because goodwill is not amortized because of its indefinite life.

Calculation for Patent:

$48,000 × 1/16 =$3,000

1/16 is what was remaining at time of the purchase

[Amortization expense =20 year legal life – the years used which is 4 years = 16 years remaining]

3. Calculation of how the assets and any related expenses should be reported on the balance sheet and income statement for 2014.

Income statement for 2014:

Calculation for Amortization expense: ($1,450 + $3,000) = $4,450

Springer Company Balance sheet at December 31, 2014:

Calculation for Copyright ($14,500 − $1,450) = $13,050

Goodwill $65,000

Calculation for Patent ($48,000 − $6,000) = $42,000

($3,000 amortization expense × 2 years =$6,000)

answer; private store;