Question: Due to rapid turnover in the accounting department a number 166982

Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Kaya Company in 2011.
1. Kaya developed a new manufacturing process, incurring development costs of TL110,000 before reaching technological feasibility. The company also purchased a patent for TL50,000. In early January, Kaya capitalized TL160,000 as the cost of the patents. Patent amortization expense of TL8,000 was recorded based on a 20-year useful life.
2. On July 1, 2011, Kaya purchased a small company and as a result acquired goodwill of TL200,000. Kaya recorded a half-year’s amortization in 2011, based on a 50-year life (TL2,000 amortization). The goodwill has an indefinite life.

Prepare all journal entries necessary to correct any errors made during 2011, Assume the books have not yet been closed for 2011.

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  • CreatedMarch 11, 2013
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