Springer Company had three intangible assets at the end of 2020 (end of the accounting year):

a. A copyright purchased on January 1, 2020, for a cash cost of $15,800. The copyright is expected to have a 10-year useful life to Springer.
b. Goodwill of $78,000 from the purchase of the Hartford Company on July 1, 2019.
c. A patent purchased on January 1, 2019, for $58,000. The inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2015. Springer intends to use the patent for its remaining life.

Required:
a. Compute the amortization expense of each intangible for the year ended December 31, 2020. The company does not use contra accounts.
b. Show how the expenses related to the three intangible assets should be reported on the income statement for 2020.
c. Show how the three intangible assets should be reported on the balance sheet for 2020.

Amortization expense can be calculated by dividing the cost of purchasing the asset by its useful remaining life after deducting the residual value from the cost. In this case, no residual value is given.

Requirement 1: Amortization expense of each intangible for the year ended December 31, 2020.

Amortization = Cost / useful life

Copyright (15,800/10) = $1,580

patent (58,000/16) = $3,625

Goodwill = No amortization due to indefinite life

Requirement 2: Expenses related to the three intangible assets should be reported on the income statement for 2020.

Amortization expense = $1,580 + $3,625

Amortization expense = $5,205

Requirement 3: Three intangible assets should be reported on the balance sheet for 2020.

Copyright 15800-1580 = 14,220

Goodwill = $78,000

Patent (58,000 - 3625) = 54,375

tallinn tallinn · Answer 2 · 2022-03-29T16:53:42+02:00

First, Goodwill = No amortization due to indefinite life

Second, Amortization expense = $5,205

Third, Copyright = 14,220

Goodwill = $78,000

Patent= 54,375

Computation of Amortization expense

Amortization expense can be Computation by dividing the cost of purchasing the asset by its useful remaining life after subtracting the residual value from the cost. In this circumstance, no residual value is given.

Requirement 1: When the Amortization expense of each intangible for the year ended December 31, 2020.

Amortization is = Cost/useful life

Copyright (15,800/10) is = $1,580

patent (58,000/16) is = $3,625

Goodwill is = No amortization due to indefinite life

Requirement 2: When the Expenses related to the three intangible assets should be reported on the income statement for 2020.

Amortization expense is = $1,580 + $3,625

Amortization expense is = $5,205

Requirement 3: Then Three intangible assets should be reported on the balance sheet for 2020.

Copyright 15800-1580 is = 14,220

Goodwill is = $78,000

Patent (58,000 - 3625) is = 54,375

Find more information about Amortization expense here:

https://brainly.com/question/18521643