During 2010, Buda Corp

Essay

During 2010, Buda Corp. had the following transactions related to intangible assets.
• The company spent a total of $195,000 in cash on research and development costs during the year. The result of this investment was to generate a patentable product on October 1, 2010. The legal costs to obtain that patent were $15,000. The useful life of the patent is determined to be 5 years.
• On April 1, the company spent $12,000 on leasehold improvements for property that has a remaining 10-year lease. The improvements are expected to last 4 years from April 1.
• On September 1, Buda determined that a trademark being carried on the company's books for $50,000 had fallen in generic usage and no longer provided any value to the company.
• On November 1, Buda sold a patent that had been purchased on January 1, 2009. The original cost of the patent to Buda was $61,920 and it had been estimated that the patent would have a useful life to Buda of 4 years. The patent has not been amortized since December 31, 2009. The selling price of the patent on November 1, 2010, is $40,000.
• On December 31, Buda determined that goodwill recorded on its books in relationship to a purchase of Marcos Inc. had been impaired. The carrying value of the goodwill on this date was $142,000, but impairment had reduced that value to $100,000.
Required:
Prepare all necessary entries related to Buda Corp.'s intangibles during 2010. Buda's year-end is December 31.