Question : 179. Prepare the following journal entries and calculations: (a) A patent that was : 1239877

 

179. Prepare the following journal entries and calculations: 

(a)

A patent that was acquired for $410,000 at the beginning of the current year expires in 15 years and is expected to have value for 4 years. Present the adjusting entry to amortize the patent for the current year.

(b)

Mineral rights on an ore deposit estimated at 4,000,000 tons of ore were acquired for $2,800,000.  Present the adjusting entry to record depletion for the current year, during which 350,000 tons of ore were removed.

(c)

Legal costs incurred to defend  the rights that a patent provided in (a) were $60,000.  At the time the patent had been in existence for 5 years.  Determine the amount to be amortized for the current fiscal year.

 

 

 

 

 

 

 

 

180. Macon Co. acquired drilling rights for $7,500,000. The oil deposit is estimated at 37,500,000 gallons. During the current year, 3,000,000 gallons were drilled.  Journalize the adjusting entry at December 31, 2011 to recognize the depletion expense.   Journal

Date

Description

Post Ref

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

181. On July 1, 2010, Howard Co. acquired patents rights for $40,000.  The patent has a useful life of 8 years and a legal life of 15 years.  Journalize the adjusting entry on December 31, 2010 to recognize the amortization.Journal

Date

Description

Post Ref

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

182. On December 31 it was estimated that goodwill of $65,000 was impaired.  In addition, a patent with an estimated useful economic life of 10 years was acquired for $60,000 on July 1. 

a)

Journalize the adjusting entry on December 31 for the impaired goodwill.

b)

Journalize the adjusting entry on December 31 for the amortization of the patent rights.

 

 

 

 

 

 

 

 

183. Clanton Company engaged in the following transactions during 2011.  Record each in the general journal below:1)  On January 3, 2011, Clanton purchased a copyright from Dalton Company with a cost of $250,000 with a remaining useful life of 25 years.2)  On January 10, 2011, Clanton purchased a trademark from Felton Company with a cost of $700,000.3)   On July 1, 2011, Clanton purchased a patent from Garrison Company at a cost of $80,000.  The remaining legal life of the patent is 15 years and the expected useful life is 11 years.4)  On July 2, 2011, Clanton paid $30,000 in legal fees to defend the patent protection purchased on July 1, 2011.5)  Recorded the appropriate amortization for the intangible assets for 2011.6)  Clanton Company includes an asset in its ledger recorded when Clanton purchased a computer service business at a price in excess of the fair value of the assets of the company in the amount of $400,000.  At December 31, 2011, $100,000 of this asset has become impaired. 

Date

Description

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

184. On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours.Using straight line depreciation, prepare the journal entry to record depreciation expense for (a) the first year, (b) the second year and (c) the last year.