Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: (a) Timber rights on a tract of land were purchased for $1,170,000 on July 5. The stand of timber is estimated at 4,500,000 board feet. During the current year, 1,370,000 board feet of timber were cut and sold. (b)
Chapter 10, Problem Set B #6
Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows:
(a) Timber rights on a tract of land were purchased for $1,170,000 on July 5. The stand of timber is estimated at 4,500,000 board feet. During the current year, 1,370,000 board feet of timber were cut and sold.
(b) On December 31, the company determined that $5,000,000 of goodwill was impaired.
(c) Governmental and legal costs of $234,000 were incurred on April 4 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.
Instructions
1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
(a) Timber rights on a tract of land were purchased for $1,170,000 on July 5. The stand of timber is estimated at 4,500,000 board feet. During the current year, 1,370,000 board feet of timber were cut and sold.
(b) On December 31, the company determined that $5,000,000 of goodwill was impaired.
(c) Governmental and legal costs of $234,000 were incurred on April 4 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.
Instructions
1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented...
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Related Book For 
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23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
ISBN: 978-0324662962