Advise if these are correct Solution Solution 1 Compute the

Advise if these are correct

Solution

Solution: 1. Compute the acquisistion cost of each assets: Particluars Amount ($) Patent 6000 Trademark 4500 Licensing Rights 40000 The acqusition cost should be the actual cost of the assets 2. Compuation of Amortization Expenses of Each Assets: Particluars Amount ($) Patent 600 Trademark 0 Licensing Rights 8000 Amortization expenses are computed by dividing the total cost of the assets with the estimated life of the assets 3. Presentation in the income statement: The total amortization expenses are reported in the expenses side of the income statement as amortization expenses. In the instant case the total amortization expenses of $8600 will come in the expenses side of the income statement 4. Presentation in the Balance Sheet: In the balance sheet the assets are shown after reducing the amortization expenses. Patent 5400 Trademark 4500 Licensing Rights 32000