Reference no: EM133014480

Question - Janes Company provided the following information on intangible assets: A patent was purchased from the Lou Company for $850,000 on January 1, 2019. Janes estimated the remaining useful life of the patent to be 10 years. The patent was carried on Lou's accounting records at a net book value of $380,000 when Lou sold it to Janes.

During 2021, a franchise was purchased from the Rink Company for $530,000. The contractual life of the franchise is 10 years and Janes records a full year of amortization in the year of purchase.

Janes incurred research and development costs in 2021 as follows: Materials and supplies $143,000 Personnel 183,000 Indirect costs 63,000 Total $389,000.

Effective January 1, 2021, based on new events that have occurred, Janes estimates that the remaining life of the patent purchased from Lou is only five more years.

Required -

1. Prepare the entries necessary for years 2019 through 2021 to reflect the above information.

2. Prepare a schedule showing the intangible asset section of Janes's December 31, 2021, balance sheet.