A.

Tarsel Corp. has been working on software to be sold. Tarsel had spent $1,000,000 developing the software when technological feasibility was established. The company spent another $600,000 readying the software for sale. The software generated $1,000,000 revenue the first year of its expected four-year life. Tarsel expects to the product to earn an additional $7,000,000 revenue in the future.

Required: Prepare journal entries for the development of the software and the first years amortization.

B.

Bot, Inc. had the following balance sheet on January 1, Year 1:

Assets		Liabilities & Equity
Cash	$ 50,000	Accounts Payable	$ 25,000
Property, Plant & Equipment	450,000	Notes Payable	260,000
Patents	15,000	Stockholders Equity	230,000
	$515,000		$515,000

On January 2, Year 2, Purchaser, Inc. acquired Bot for $800,000 cash. On that date, Bots property, plant, and equipment had a fair value of $420,000, and its Patents had a fair value of $125,000. In addition, Bot had research and development with an assessed value of $150,000. For all other amounts, the book value of January 1, Year 2, equaled fair value. Compute the goodwill resulting from the purchase of Bot.