Assignment

1. Powerglide plc, organized in 2021, has set up a single account for all intangible assets. The
following summary discloses the debit entries that have been recorded during 2022.

Required:
Prepare the necessary entries to clear the Intangible Assets account and to set up separate
accounts for distinct types of intangibles. Make the entries as of December 31, 2022, recording
any necessary amortization and reflecting all balances accurately as of that date. (Use straight-
line amortization)!

2. During 2021, Matsumura Ltd. spent ¥170,000 in research costs. As a result, a new product
called the New Age Piano was patented. The patent was obtained on October 1, 2021, and
had a legal life of 20 years and a useful life of 10 years. Legal costs of ¥24,000 related to the
patent were incurred as of October 1, 2021. (Amounts are in thousands.)

Required:
a. Prepare all journal entries required in 2021 and 2022 as a result of the transactions above!
b. On June 1, 2023, Matsumura spent ¥12,400 in legal fees, which resulted in a new patent.
The estimate of useful life is 12 years from June 1, 2023. Prepare all journal entries
required in 2023 and 2024!
c. In 2025, Matsumura determined that a competitor’s product would make the New Age
Piano obsolete and the patent worthless by December 31, 2026. Prepare all journal
entries required in 2025 and 2026!