The Mallory Corporation

On December 31, 2006, the Mallory Corporation had the following activity in its fixed assets record.

MALLORY CORPORATION - FIXED ASSETS

Equipment

Cost

Salvage

Life

Method of Depreciation

Machine 1

$65,000

$5,000

5

DDB purchased 1/1/2006

Building #3

$900,000 not including land

$50,000

25

S/L purchased 6/30/2006

Mine 316

$1,000,000

$0

1,000,000 tons

30,000 tons extracted. Mine purchased 1/1/2006

Patent

$50,000

0

17

Purchased 1/1/2006

Truck 1

$35,000

$3,000

200,000 miles

Units of production: total miles depreciated to date are 60,000 as of January 1, 2006. Miles this year 30,000

REQUIRED: Compute the depletion, amortization, and depreciation expense on December 31, 2006 for each asset listed above Record the depreciation journal entries for the assets above Suppose that Machine 1 was sold for $40,000 on 12/31/2008, record the entry Suppose that the corporation spent $20,000 in 2006 to defend the patent. Record the entry. Financial Reporting on Fixed Assets: Prepare a partial balance sheet statement for Mallory Corporation showing Fixed and Intangible assets