ACCT 311-On January 2, Year 1, Gant Co. purchased a

Subject: Business    / Accounting
Question

On January 2, Year 1, Gant Co. purchased a franchise with a useful life of 5 years for $60,000 and an annual fee of 1% of franchise revenues. Franchise revenues were $20,000 during Year 1. Gant projects future revenues of $40,000 in Year 2 and $60,000 per year for the following 3 years. Gant uses the straight-line method of amortization. What amount should Gant report as intangible asset-franchise, net of related amortization in its December 31, Year 1, balance sheet?