Question

Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows:
a. Goodwill in the amount of $29,500,000 was purchased on January 18.
b. Governmental and legal costs of $225,600 were incurred on July 5 in obtaining a patent with an estimated economic life of 8 years. Amortization is to be for one-half year.
c. Timber rights on a tract of land were purchased for $820,000 on April 10. The stand of timber is estimated at 4,000,000 board feet. During the current year, 550,000 board feet of timber were cut.

Instructions
1. Determine the amount of the amortization or depletion expense for the current year for each of the foregoing items.
2. Journalize the adjusting entries to record the amortization or depletion expense for each item.



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  • CreatedNovember 07, 2012
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