Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows:
A. | Timber rights on a tract of land were purchased for $1,600,000 on February 22. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,100,000 board feet of timber were cut and sold. |
B. | On December 31, the company determined that $3,750,000 of goodwill was impaired. |
C. | Governmental and legal costs of $6,600,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year. |
1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the items in the Instructions.
A. | |
B. | |
C. |
2. Journalize the transactions and the adjusting entries on December 31. Refer to the Chart of Accounts for exact wording of account titles. Scroll down to access pages 2 through 3 of the journal.
a. Timber rights on a tract of land were purchased for $1,600,000 on February 22. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,100,000 board feet of timber were cut and sold.
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b. On December 31, the company determined that $3,750,000 of goodwill was impaired.
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c. Governmental and legal costs of $6,600,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.
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Data related to the acquisition of timber rights and intangible assets during the current year ended...
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