Comprehensive In class Depreciation, depletion & impairment Nov 2nd

1. Intangible asset acquisition and amortization exercise:

Part 1: A publisher purchases the copyright on a book for $1,000 on January 1 of this year. The copyright lasts five more years. The company plans to sell prints for seven years. Prepare entries to record the purchase of the copyright on January 1 and its annual amortization on December 31^st

Part 2: On January 3 of this year a retailer pays $9,000 to modernize its leased store. Improvements include lighting, partitions and a sound system. These improvements are estimated to yield benefits for five years and the retailer leases its store and has three years remaining onits lease. Prepare the entry to record cost of modernization and amortization for the end of this year.

2. A company acquires $45,000 in new web servers. In exchange, the company trades in old web servers along with a cash payment. The old servers originally cost $30,000 and had accumulated depreciation of $23,400 at the time of trade in. Prepare entries under two different assumptions with both exchanges having commercial substance
   1. Old servers have a trade-in allowance of $3,000
   2. Old servers have a trade-in allowance of $7,000