Question
Impaired Goodwill and Amortization of Patent On April 1, a patent with an estimated useful economic life of 12 years was acquired for $86,400. In
Impaired Goodwill and Amortization of Patent
On April 1, a patent with an estimated useful economic life of 12 years was acquired for $86,400. In addition, on December 31, it was estimated that goodwill of $35,500 was impaired.
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a. Record the acquisition of patent. If an amount box does not require an entry, leave it blank.
| April 1 |
| Patents | Patents | |
| Cash | Cash |
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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 | Amortization Expense-Patents | |
| Patents | Patents |
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A separate contra asset account is usually not used for intangible assets. Pay close attention to the date of purchase.
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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 | Loss from Impaired Goodwill | |
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Goodwill Goodwill Feedback Area
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Goodwill is not amortized like other intangible assets. If Goodwill is impaired, a loss should be recorded.
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Partially correct
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The Curriculum Management Audit
Authors: Larry E. Frase, Fenwick W. English, William K. Poston
1st Edition
0810839318, 9780810839311
