Sorenson Manufacturing was incorporated on January 3, 20X1. The corporations financial statements for its first years operations were not examined by a PA. You have been engaged to audit the financial statements for the year ended December 31, 20X2, and your examination is substantially completed.

A partial trial balance of the companys accounts is given below:

EXHIBIT EP 14-6

Sorenson Manufacturing Corporation Partial Trial Balance at December 31, 20X2
TRIAL BALANCE
	DEBIT	CREDIT
Cash	$11,000
Accounts receivable	42,500
Allowance for doubtful accounts		$500
Inventories	38,500
Machinery	75,000
Equipment	29,000
Accumulated amortization		10,000
Patents	85,000
Leasehold improvements	26,000
Prepaid expenses	10,500
Goodwill	24,000

The following information relates to accounts that may yet require adjustment:

1. Patents for Sorensons manufacturing process were purchased January 2, 20X2, at a cost of $68,000. An additional $17,000 was spent in December 20X2 to improve machinery covered by the patents and charged to the patents account. The patents had a remaining legal term of 17 years.

2. The balance in the goodwill account includes $24,000 paid December 30, 20X1, for an advertising program estimated to increase Sorensons sales over a period of four years following the disbursement.

3. The leasehold improvement account includes (1) the $15,000 cost of improvements, with a total estimated useful life of 12 years, which Sorenson, as tenant, made to leased premises in January 20X1; (2) movable assembly line equipment costing $8,500, which was installed in the leased premises in December 20X2; and (3) real estate taxes of $2,500 paid by Sorenson, which, under the terms of the lease, should have been paid by the landlord. Sorenson paid its rent in full during 20X2. A 10-year non-renewable lease was signed January 3, 20X1, for the leased building that Sorenson used in manufacturing operations. No amortization of the leasehold improvements has been recorded.

Required:

Prepare adjusting entries as necessary. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)