1. Assume you are the chief accountant of Exxon Mobil. Describe to the Board of Directors the accounting for natural resources, including their acquisition, and cost allocation (depletion). Use a real-world example to explain your answers.
2. Assume you are the chief accountant of Microsoft Corporation. Describe to the Board of Directors the accounting for intangible assets, including their acquisition and cost allocation (amortization). Use an example in your explanations.
3. On June 1, ABC Inc. purchased a patent for $75,000 with a useful life of 10 years. Prepare the journal entry to amortize the patent at the end of the first year assuming ABC Inc. follows a calendar year.
4. On January 4, ABC Inc. purchased a music distributor's collection of lyrics and songs for $425,000. The copyrights are expected to last another ten years. Prepare the journal entry to amortize the copyright at the end of the first year.

   For each item listed below, enter a code letter in the blank space to indicate the usage allocation terminology for the item. Use the following codes for your answer:

   AAmortization PDepletion

   DDepreciation NNone of these

   ____ 1. Goodwill ____ 7. Timberlands

   ____ 2. Land ____ 8. Franchises (indefinite life)

   ____ 3. Buildings ____ 9. Licenses (limited life)

   ____ 4. Patents ____ 10. Land Improvements

   ____ 5. Copyrights ____ 11. Oil Deposits

   ____ 6. Research and development costs ____ 12. Equipment