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 track of land were purchased for $720,000 on July 11. The
stand of timber is estimated a 2,250,000 board feet. During the current year,
600,000 board feet of timber were cut.
b. Goodwill in the amount of $10,000,000 was purchased on January 3.
c. Governmental and legal costs of $420,000 were incurred on October 2 in obtaining a patent with an estimated economic life of 10 years. Amortization is to
be for one-fourth year.
1. Determine the amount of the amortization or depletion expense for the current
year for each of the foregoing items.
2. Journalize the adjusting entries required to record the amortization or depletion
for each item.
Please see the attached file.
1 The concepts relating to depletion and amortization are fully ...
Word document with concepts relating to depletion and amortization fully explained, detailed calculations and formulas for each asset amortization or depletion, adjusting entries for amortization or depletion with explanation and special remarks on Goodwill provided.