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 Goslin Company in 2006.
1. Goslin developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $48,000. In early January. Goslin capitalized
$184,000 as the cost of the patents. Patent amortization expense of $9,200 was recorded based on a 20-year useful life.
2. On July 1. 2006, Goslin purchased a small company and as a result acquired goodwill of
$92,000. Goslin recorded a half-year's amortization in 2006, 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 2006. Assume the books have not vet been closed for 2006.
Step by Step Answer:
Financial Accounting Text Only
ISBN: 9780006575405
5th Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel