Impaired Goodwill and Amortization of Patent On April 1, a patent with an estimated useful economic...

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Impaired Goodwill and Amortization of Patent On April 1, a patent with an estimated useful economic...

Impaired Goodwill and Amortization of Patent

On April 1, a patent with an estimated useful economic life of 12 years was acquired for $72,000. In addition, on December 31, it was estimated that goodwill of $59,000 was impaired.

a. Record the acquisition of patent. If an amount box does not require an entry, leave it blank.

April 1

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

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

business accounting

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Answer 1

Answer #1

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Journal entries

Date	Accounts title	Debit	Credit
a. April 1	Patents	$72,000
	Cash		$ 72,000
	(To record Patents acquired)

b. Dec 31	Amortization expense - Patent( 72000/12=6000*9/12)	$ 4,500
	Accumulated Amortisation - Patents		$ 4,500
	(To record Adjusting entry to record amortisation)


c. Dec 31	Loss on Goodwill Impairment	$59,000
	Goodwill		$ 59,000
	(To record Goodwill impaired)

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Answer 2

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