Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows a Timber rights on a tract of land were purchased for $3,180,540 on February 22 The stand of timber is estimated at 5,214,000 board feet During the current year, 1,125,600 board feet of timber were cut and sold b On December 31, the company determined that $4,023,000 of goodwill was impaired c Governmental and legal costs of $6,720,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years Amortization is to be for three fourths of a year Required 1 Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items 2 Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item Starting questions 1 Determine the amount of the amortization, depletion, or impairment for the current year for each of the items in the Instructions a b c General Journal 2 Journalize the transactions and the adjusting entries on December 31 Scroll down to access pages 2 through 3 of the journal General Journal Instructions a Timber rights on a tract of land were purchased for $3,180,540 on February 22 The stand of timber is estimated at 5,214,000 board feet During the current year, 1,125,600 board feet of timber were cut and sold PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 b On December 31, the company determined that $4,023,000 of goodwill was impaired PAGE 2 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3 c Governmental and legal costs of $6,720,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years Amortization is to be for three fourths of a year PAGE 3 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Adjusting Entries 2 3

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

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

a.	Timber rights on a tract of land were purchased for $3,180,540 on February 22. The stand of timber is estimated at 5,214,000 board feet. During the current year, 1,125,600 board feet of timber were cut and sold.
b.	On December 31, the company determined that $4,023,000 of goodwill was impaired.
c.	Governmental and legal costs of $6,720,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.

Required:

1.	Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2.	Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item.

Starting questions

1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the items in the Instructions.

a.
b.
c.

General Journal

2. Journalize the transactions and the adjusting entries on December 31. Scroll down to access pages 2 through 3 of the journal.

General Journal Instructions

a. Timber rights on a tract of land were purchased for $3,180,540 on February 22. The stand of timber is estimated at 5,214,000 board feet. During the current year, 1,125,600 board feet of timber were cut and sold.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

b. On December 31, the company determined that $4,023,000 of goodwill was impaired.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

c. Governmental and legal costs of $6,720,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.

PAGE 3

JOURNAL.

ACCOUNTING EQUATION