on december 31 2016 warren company s intangible assets account reflects two assets 1 3387240

On December 31, 2016, Warren Company s Intangible Assets account reflects two assets: 1. Goodwill, $145,000. This amount was recorded in December 2015 as part of the cost of acquiring an existing business. It represents the excess of the total purchase price, over the value of net identifiable assets. Warren has studied carefully the operations and concluded that the fair value of goodwill on December 31, 2016, is $110,000 and that benefits should exist for at least another 10 years. 2. Patent, $299,000. The patent was purchased on January 2015 for $322,000, when it had a remaining legal life of 14 years. On December 31, 2015, $23,000 of cost was amortized. On December 31, 2016, Warren estimates that the patent will be useful for only another 9 years (through December 31, 2025). However, it is estimated that the patent still has a value to the company of over $310,000. For each of the intangibles-goodwill and patent-explain what entry, if any, is necessary at the end of 2016 to adjust the accounts.


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