Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly

Question:

Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by the Thorne Company in 2008.

1. Thorne developed a new manufacturing process, incurring research and development costs of

\($136,000.\) The company also purchased a patent for \($60,000.\) In early January, Thorne capitalized \($196,000\) as the cost of the patents. Patent amortization expense of \($9,800\) was recorded based on a 20-year useful life.

2. On July 1, 2008, Thorne purchased a small company and as a result acquired goodwill of \($92,000.\) Thorne recorded a half-year’s amortization in 2008, based on a 50-year life (\($920\) amortization). The goodwill has an indefinite life.

Instructions 

Prepare all journal entries necessary to correct any errors made during 2008. Assume the books have not yet been closed for 2008.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Principles

ISBN: 9780471980193

8th Edition

Authors: Jerry J Weygandt, Donald E Kieso, Paul D Kimmel

Question Posted: