On January 1, 2011, Landon Company purchased a patent for $250,000 to allow it to improve its

Question:

On January 1, 2011, Landon Company purchased a patent for $250,000 to allow it to improve its product line. On July 1, 2011, Landon purchased another existing business in a nearby city for a total cost of $750,000. The market value of the land, building, equipment, and other tangible assets was $550,000. The excess $200,000 was recorded as . Assuming Landon amortizes patents over a 20-year period, record the following:
1. The purchase of the patent on January 1, 2011.
2. The amortization of the patent at December 31, 2011.
3. Under what conditions would be amortized on the books of Landon?

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...