Selected accounts of the Zena Company are listed below On January 1, 2016, the only intangible asset in the company 's accounts was Goodwill This was recorded in 2009 when the company acquired another company and paid $300,000 more than the fair market value of the net identifiable tangible assets ...

GENERAL JOURNAL PAGE DATE DESCRIPTION POST REF DEBIT CREDIT 2016 1 May 10 Product Formulas 189 0 0 0 ...

Selected accounts of the Zena Company are listed below. On January 1, 2016, the only intangible asset

Question:

Selected accounts of the Zena Company are listed below. On January 1, 2016, the only intangible asset in the company's accounts was . This was recorded in 2009 when the company acquired another company and paid $300,000 more than the fair market value of the net identifiable tangible assets acquired. For two years, the company amortized the costs on the basis of a 40-year life, charging a total of $15,000 ($7,500 each year) to an account called Amortization Expense-. However, no amortization of goodwill has been recorded since 2010. Transactions and events that took place at the company during 2016 are given below.
INSTRUCTIONS
1. Record the transactions for 2016 in general journal form.
2. Record amortization of the , where appropriate, for the year ended December 31, 2016.
3. Record impairment of assets, where appropriate, on December 31, 2016.
ACCOUNTS
Cash
Computer Software
Patents
Product Formulas

Amortization Expense-Patents
Amortization Expense-Computer Software
Amortization Expense-Product Formulas
Impairment of Intangibles
TRANSACTIONS AND OTHER INFORMATION
1. On May 10, 2016, the company paid $189,000 to purchase a product formula. The formula is expected to have a useful life of seven years.
2. On July 5, the company paid $666,000 for a patent having a useful life of 9 years.
3. On September 22, the company purchased a unique computer program for $208,000. This program has an estimated useful life of four years.
4. During the year, the company recorded various cash expenditures of $220,000 for labor and supplies used in its research department. (Date entry December 31.)
5. At the end of 2016, the company reviewed the goodwill shown in the accounts. Based on the profitability of activities acquired in purchasing the other business, the owners of the business think the goodwill has a value of $230,000 and should be of benefit for many more years.
Analyze: Based on the transactions above, what is the total net book value of Zena Company's on December 31, 2016?
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...