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Splish Brothers Golf Inc

Accounting

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Splish Brothers Golf Inc. was formed on July 1, 2019, when Matt Magilke purchased the Old Master Golf Company. Old Master provides video golf instruction at kiosks in shopping malls. Magilke plans to integrate the instructional business into his golf equipment and accessory stores. Magilke paid $780,000 cash for Old Master. At the time, Old Master's balance sheet reported assets of $670,000 and liabilities of $190,000 (thus owners' equity was $480,000). The fair value of Old Master's assets is estimated to be $810,000. Included in the assets is the Old Master trade name with a fair value of $10,000 and a copyright on some instructional books with a fair value of $43,200. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 40 years.

 

 

(a)

 

   

Prepare the intangible assets section of Splish Brothers Golf Inc. at December 31, 2019.

 

SPLISH BROTHERS GOLF INC.

Intangibles Section of Balance Sheet

December 31, 2019

Trade Names $10,000

Copyrights 42,660

Goodwill 160,000

Total Intangible Assets $212,660

 

How much amortization expense is included in Splish Brothers income for the year ended December 31, 2019?

 

Amortization expense $540

 

 

(b)

Prepare the journal entry to record amortization expense for 2020. Prepare the intangible assets section of Splish Brothers Golf Inc. at December 31, 2020. (No impairments are required to be recorded in 2020.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

 

Account Titles and Explanation Debit Credit

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SPLISH BROTHERS GOLF INC.

Intangibles Section of Balance Sheet

choose the accounting period

 

enter a balance sheet item

$enter a dollar amount

enter a balance sheet item

enter a dollar amount

enter a balance sheet item

enter a dollar amount

select a closing section name

 

$enter a total amount for this section