Question

17. EX.09-20.BLANKSHEET.ALGO (Algorithmic) Amortization entries Instructions Kleen Company acquired patent rights on January 10 of Year 1 for $940.500. The patent has a useful life equal to its lege Required: a. Determine the patent amortization expense for Year 4 ended December 31. b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. Refer to the Chart of Acec account titles. Chart of Accounts CHART OF ACCOUNTS Kleen Company General Ledger REVENUE 410 Sales 610 Interest Revenue 620 Gain on Sale of Delivery Truck 621 Gain on Sale of Equipment 622 Gain on Sale of Patents ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 119 Prepaid Insurance 120 Land 123 Delivery Truck 124 Accumulated Depreciation-Delivery Truck 125 Equipment 128 Accumulated Depreciation Equipment 130 Mineral Rights 131 Accumulated Depletion EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Delivery Truck 523 Delivery Expense 524 Repairs and Maintenance Expense 529 Selling Expenses 531 Rent Expense

Answer 1

a Patent amortization expense = ($940,500/8 years)+($40,200/5) =$125,602.5 нь Date Credit Account title Amortization expense - Patent Patent (or) Accumulated amortization on patents Debit 125,602.50 125,602.50