During 2021 Blackmud Research Had the Following Transactions for Cash

question 177

Essay

During 2021 Blackmud Research had the following transactions for cash. This is Blackmud's first year of operations.
Mar 1 Registered a new patent, with a legal life of 20 years, at a cost of $ 30,000.
Jun 30 Incurred research costs of $ 68,000.
Aug 1 Incurred development costs of $ 50,000 related to a product that meets the standards required for capitalization of costs. The costs are expected to provide commercial benefits for 5 years.
Aug 31 Purchased a trademark with an indefinite life for $ 102,000.
Nov 1 Purchased software copyright for $ 300,000. The copyright has a remaining legal life of 30 years, and the related software is expected to produce revenue for 6 years.
Instructions
a) Record the transactions.
b) Prepare the section of the December 31, 2021 balance sheet of Blackmud Research that reports intangible assets. Show calculations where applicable.

Grasp the principle of creative destruction and its role in economic development.

Comprehend how innovation affects long-term profits in competitive industries.

Recognize the economic significance of marginal cost and its implications for resource allocation.

Learn about the efficiency of competitive markets in resource allocation due to the equality of price and marginal costs.

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Definitions:

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