Megan Corporation purchased machinery on January 1, 2017, at a cost of $250,000.

The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $30,000. The company is considering different depreciation methods that could be used for fi nancial reporting purposes.

Instructions

(a) Prepare journal entries to record the transactions.

(b) Prepare journal entries to record the 2018 amortization expense for intangible assets.

(c) Prepare the intangible assets section of the balance sheet at December 31, 2018.

(d) Prepare the note to the fi nancial statements on Amato Corporation’s intangible assets as of December 31, 2018.