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On January 1, 2017, Cullumber Company had a balance of $359,500 of goodwill on its balance sheet that resulted from the purch

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Answer #1
Assets = Liabilities + Stockholder's Equity
Retained earnings
Cash + Patent + Franchise + Goodwill = + Common stock + Revenue - Expense
(a)Bal 359,500
Jan 2 (313,950) 313,950
July 1 (583,200) 583,200
Sept 1 (176,500) (176,500)
(b)Dec 31 (44,850) (32,400) (77,250)

Calculation of amortization expense :-

Patent = 313,950/7 = $44,850

Franchise = 583,200/9 x 6/12 = $32,400

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