Amortization and depletion entriesCheck My Work

Asset minus residual value equals depreciable cost. Straight$-$line method allocates the depreciable cost of the asset equally over the expected useful life.

The book value is the fixed asset cost less accumulated depreciation.

Revising depreciation is necessary when estimates of residual values and$/$or useful lives of fixed assets change due to abnormal wear and tear or obsolescence.

Data related to the acquisition of timber rights and intangible assets during the current year ended December $31$ are as follows:

a$.$ On December $31,$ the company determined that $$930,000$ of goodwill was impaired.

b$.$ Governmental and legal costs of $$6,720,000$ were incurred on September $30$ in obtaining a patent with an estimated economic life of $15$ years. Amortization is to be for one$-$fourth of a year.

c$.$ Timber rights on a tract of land were purchased for $$800,000$ on February $4.$ The stand of timber is estimated at $5,000,000$ board feet. During the current year, $1,400,000$ board feet of timber

were cut and sold.

Required:

Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. Do not round your intermediate calculation.

Item

Impairment, Amortization or Depletion Expense

a$.$

$

b$.$

$

c$.$

$

Journalize the adjusting entries to record the amortization, depletion, or impairment for each item. If an amount box does not require an entry, leave it blank.

a$.$

b$.$

c$.$