Impaired Goodwill and Amortization of Patent

On April 1, a patent with an estimated useful economic life of 12 years was acquired for $72,000. In addition, on December 31, it was estimated that goodwill of $61,000 was impaired.

a. Record the acquisition of patent. If an amount box does not require an entry, leave it blank.

April 1	Patents	fill in the blank e9ff4bfad05506d_2	fill in the blank e9ff4bfad05506d_3
	Cash	fill in the blank e9ff4bfad05506d_5	fill in the blank e9ff4bfad05506d_6

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Recall that goodwill is not amortized because its useful life is indefinite.

b. Journalize the adjusting entry on December 31 for the amortization of the patent rights. Do not round intermediate calculations. If an amount box does not require an entry, leave it blank.

Dec. 31	Amortization Expense-Patents	fill in the blank e7bba005cfbb046_2	fill in the blank e7bba005cfbb046_3
	Patents	fill in the blank e7bba005cfbb046_5	fill in the blank e7bba005cfbb046_6

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A separate contra asset account is usually not used for intangible assets. Pay close attention to the date of purchase.

c. Journalize the adjusting entry on December 31 for the impaired goodwill. If an amount box does not require an entry, leave it blank.

Dec. 31	Loss from Impaired Goodwill	fill in the blank 29ff2405803efe5_2	fill in the blank 29ff2405803efe5_3
	Goodwill	fill in the blank 29ff2405803efe5_5	fill in the blank 29ff2405803efe5_6