Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by the Satyr Company in 2012.
1. Satyr developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $60,000. In early January, Satyr capitalized $196,000 as the cost of the patents. Patent amortization expense of $9,800 was recorded based on a 20-year useful life.
2. On July 1, 2012, Satyr purchased a small company and as a result acquired goodwill of $92,000. Satyr recorded a half-year’s amortization in 2012, based on a 50-year life ($920 amortization). The goodwill has an indefinite life.
Prepare all journal entries necessary to correct any errors made during 2012. Assume the books have not yet been closed for 2012.