Posted: July 12th, 2016

What are intangible assets?

E23-3 Preparation of Operating Activities Section – Indirect Method, Periodic Inventory

The income statement of Rodriquez Company is shown below.

RODRIQUEZ COMPANY
Income Statement
For The Year Ended December 31, 2012
Sales $6,900,000
Cost of goods sold
Beginning inventory $1,900,000
Purchases 4,400,000
Goods available for sale 6,300,000
Ending inventory 1,600,000
Cost of goods sold 4,700,000
Gross profit 2,200,000
Operating expenses
Selling expenses 450,000
Administrative expenses 700,000 1,150,000
Net income $1,050,000

Additional information:
1. Accounts receivable decreased 0,000 during the year.
2. Prepaid expenses increased 0,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.
4. Accrued expenses payable decreased $120,000 during the year.
5. Administrative expenses include depreciation expense of $60,000What are intangible assets? Can you provide a few examples? Why are these important, and how are they recorded?