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Janes Company provided the following information on intangible assets: A patent was purchased from...

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Accounting

Janes Company provided the following information on intangible assets:

  1. 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 Lous accounting records at a net book value of $380,000 when Lou sold it to Janes.
  2. 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.
  3. 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

  1. 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 Janess December 31, 2021, balance sheet.

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