Innovative Inventions Ltd. had the following account balances on January 1, 2015:

During the year, the corporation completed the following transactions and adjusting entries affecting long-term assets.
May 1. Purchased a patent from another company for $600,000.
Jul. 5. Sold furniture for $24,000 that was purchased on January 9, 2010, at a cost of $67,200. The furniture was depreciated on a straight-line basis over 10 years with an expected residual value of $2,000. (Record depreciation to date of sale.)
Oct. 1. Purchased equipment for $52,000.
Dec. 31. Innovative Inventions Ltd.€™s accountant feels the carrying amount of the business exceeds its fair value by $220,000.
31. Recorded depreciation on the building using the straight-line method, assuming an estimated life of 25 years and a residual value of $300,000.
31. Recorded depreciation on the furniture and equipment using the straight-line method, assuming an estimated useful life of 10 years and no residual value.
31. Recorded amortization on the patents using the double-declining balance method, assuming an estimated useful life of 10 years and a $100,000 residual value.
Instructions
1. Journalize the transactions and the adjusting entries.
2. Prepare the balance sheet presentation for Innovative Inventions€™ long-term assets as at December 31, 2015, with comparative amounts for December 31, 2014.

Transcribed Image Text:

Accumulated Depreciation/Amortization Cost Land Building Furniture and equipment Patents Goodwill $ 750,000 2,900,000 1.160,000 512,000 4,028.900 64D,000 .921,000 1.800,000