Question 2

Due to rapid turnover in the accounting department, a few transactions involving intangible assets were improperly recorded by Henry Company in 2020.

1

Henry developed a new manufacturing process, incurring research and development costs of

$186,900

The company also purchased a patent for cash: $39,100

In early January, Henry capitalized the costs of patents $226,000

Patent amortization was based on a 20-year useful life, amortization expense was

$11,300

2

On July 1, 2020, Henry purchased a small company and as a result acquired goodwill of $92,000

Henry recorded a half-year's amortization in 2020, based on a 50-year life amortization $920

Instructions:

Prepare all journal entries necessary to correct any errors made during 2020. Assume the books have not yet been closed for 2020