On April 1, a patent with an estimated useful economic life of 12 years was acquired for $454,560. In addition, on December 31, it was estimated that goodwill of $3,656,700 was impaired.
CHART OF ACCOUNTS |
|
General Ledger |
| ASSETS | 110 | Cash | 111 | Petty Cash | 112 | Accounts Receivable | 114 | Interest Receivable | 115 | Notes Receivable | 116 | Merchandise Inventory | 117 | Supplies | 119 | Prepaid Insurance | 120 | Land | 123 | Delivery Truck | 124 | Accumulated Depreciation-Delivery Truck | 125 | Equipment | 126 | Accumulated Depreciation-Equipment | 130 | Mineral Rights | 131 | Accumulated Depletion | 132 | Goodwill | 133 | Patents | | LIABILITIES | 210 | Accounts Payable | 211 | Salaries Payable | 213 | Sales Tax Payable | 214 | Interest Payable | 215 | Notes Payable | | EQUITY | 310 | Common Stock | 311 | Retained Earnings | 312 | Dividends | | | REVENUE | 410 | Sales | 610 | Interest Revenue | 620 | Gain on Sale of Delivery Truck | 621 | Gain on Sale of Equipment | 622 | Gain on Sale of Patent | 623 | Gain on Sale of Goodwill | | EXPENSES | 510 | Cost of Merchandise Sold | 520 | Salaries Expense | 521 | Advertising Expense | 522 | Depreciation Expense-Delivery Truck | 523 | Delivery Expense | 524 | Repairs and Maintenance Expense | 529 | Selling Expenses | 531 | Rent Expense | 532 | Depreciation Expense-Equipment | 533 | Depletion Expense | 534 | Amortization Expense-Patents | 535 | Insurance Expense | 536 | Supplies Expense | 539 | Miscellaneous Expense | 710 | Interest Expense | 720 | Loss on Sale of Delivery Truck | 721 | Loss on Sale of Equipment | 722 | Loss on Sale of Patent | 723 | Loss from Impaired Goodwill | |
X
General Journal
General Journal Instructions
a. Journalize the entry to record the acquisition of the patent.
CHART OF ACCOUNTS |
|
General Ledger |
| ASSETS | 110 | Cash | 111 | Petty Cash | 112 | Accounts Receivable | 114 | Interest Receivable | 115 | Notes Receivable | 116 | Merchandise Inventory | 117 | Supplies | 119 | Prepaid Insurance | 120 | Land | 123 | Delivery Truck | 124 | Accumulated Depreciation-Delivery Truck | 125 | Equipment | 126 | Accumulated Depreciation-Equipment | 130 | Mineral Rights | 131 | Accumulated Depletion | 132 | Goodwill | 133 | Patents | | LIABILITIES | 210 | Accounts Payable | 211 | Salaries Payable | 213 | Sales Tax Payable | 214 | Interest Payable | 215 | Notes Payable | | EQUITY | 310 | Common Stock | 311 | Retained Earnings | 312 | Dividends | | | REVENUE | 410 | Sales | 610 | Interest Revenue | 620 | Gain on Sale of Delivery Truck | 621 | Gain on Sale of Equipment | 622 | Gain on Sale of Patent | 623 | Gain on Sale of Goodwill | | EXPENSES | 510 | Cost of Merchandise Sold | 520 | Salaries Expense | 521 | Advertising Expense | 522 | Depreciation Expense-Delivery Truck | 523 | Delivery Expense | 524 | Repairs and Maintenance Expense | 529 | Selling Expenses | 531 | Rent Expense | 532 | Depreciation Expense-Equipment | 533 | Depletion Expense | 534 | Amortization Expense-Patents | 535 | Insurance Expense | 536 | Supplies Expense | 539 | Miscellaneous Expense | 710 | Interest Expense | 720 | Loss on Sale of Delivery Truck | 721 | Loss on Sale of Equipment | 722 | Loss on Sale of Patent | 723 | Loss from Impaired Goodwill | |
X
General Journal
General Journal Instructions
a. Journalize the entry to record the acquisition of the patent.
PAGE 2
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY |
1 | | | | | | | | |
2 | | | | | | | | |
b. Journalize the adjusting entry on December 31 for the amortization of the patent rights.
PAGE 2
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY |
1 | | Adjusting Entries | | | | | | |
2 | | | | | | | | |
3 | | | | | | | | |
c. Journalize the adjusting entry on December 31 for the impaired goodwill.