Problem 1

Jan 2 Organization expense 233,000

Cash 233,000

15 Representation expense 15,000

Cash 15,000

Apr 1 Patent 492,500

Cash 492,500

May 1 License 200,000

Trademark 100,000
Ordinary shares 300,000

July 1 PPE 1,310,000

Cash 1,310,000

Dec 31 Research and development expense 1,750,000

Cash 1,750,000

1 Cost of patent 492,500

2 Cost of licenses 200,000

3 Cost of trademark 100,000

4 Patent (492500 * 5/6) 430,938

Licenses 177,778
Trademark 88,889
Carrying amount of intangible assets 697,604

5 Organization expense 233,000

Representation expense 15,000
Research and devt expense 1,750,000
Total expense 1,998,000

Problem 2
A 1 Patent 20,000
Computer software 50,000
Amortization of intangible assets, 2014 70,000
C 2 Copyright (400,000 - 8,000/.05) 240,000
Tradename (350,000 - 15000/.05) 50,000
Goodwill (3,000,000 - 200,000 * 14.0939 181,220
Total loss on impairment 471,220

B 3 Goodwill (900,000 - 200,000 * 14.0939) 718,780

A 4 Patent 180,000
Copyright 160,000
Tradename 300,000
Computer software 50,000
Other intangible assets 690,000

Problem 3
C 1 Patent A, Dec. 31, 2014 38,125

A 2 Patent B, Dec. 31, 2014 141,250

D 3 Patent C, Dec. 31, 2014 156,600

D 4 Patent A 2,500
Patent B 15,000
Patent C 10,800
Intangible assets, Dec 31, 2014 28,300