Fuzziwig's Candles Has Two Intangible Assets Calculate the Amount of Amortization Expense That Should Be Reported

question 32

Essay

Fuzziwig's Candles has two intangible assets.Information concerning each is provided in the following table:
$\begin{array}{lrr}&\underline{ \text {Goodwill}}& \underline{ \text {Trademark}}\\\text { Date of purchase } & \text { June } 30, \text { Year 1 } & \text { January 1, Year } 1 \\\text { Cost } & \$ 500,000 & \$ 250,000 \\\text { Legal life } & \text { None } & 10 \text { years } \\\text { Useful life } & 40 \text { vears } & 5 \text {years }\end{array}$

Calculate the amount of amortization expense that should be reported for Year 1.

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Definitions:

Seasonal

Pertaining to changes, fluctuations, or patterns that occur at specific times of the year or in specific seasons, often due to changes in weather, holidays, or business cycles.

Financial Position

The status of the assets, liabilities, and equity of an entity as reflected on its financial statements at a specific point in time.

Apparent

Clearly visible or understood; obvious.

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers.