Question: Bluestone Company had three intangible assets at the end of the current year:
a. A patent purchased this year from Miller Co. on January 1 for a cash cost of $3,600. When purchased, the patent had an estimated life of 12 years.
b. A trademark was registered with the federal government for $10,500. Management estimated that the trademark could be worth as much as $250,000 because it has an indefinite life.
c. Computer licensing rights were purchased this year on January 1 for $40,000. The rights are expected to have a five-year useful life to the company.
Required: 1. Compute the acquisition cost of each intangible asset.
2. Compute the amortization of each intangible for the current year ended December 31. (Do not round intermediate calculations.)
3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.