Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly
Question:
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by the Glover Company in 1998:
1. Glover developed a new manufacturing process, incurring research and development costs of \(\$ 136,000\). The company also purchased a patent for \(\$ 39,100\). In early January Glover capitalized \(\$ 175,100\) as the cost of the patents. Patent amortization expense of \(\$ 10,300\) was recorded based on a 17 -year useful life.
2. On July 1, 1998, Glover purchased a small company and as a result acquired goodwill of \(\$ 76,000\). Glover recorded a half-year's amortization in 1998 based on a 50 -year life ( \(\$ 760\) amortization).
\section*{Instructions}
Prepare all journal entries necessary to correct any errors made during 1998. Assume the books have not yet been closed for 1998 .
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471169192
1st Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso