Explore BrainMass

Explore BrainMass

    Plant assets disposal and amortization of goodwill

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I have two problems that I am unable to find a solution. Please see attachments.

    E10-6 Journalize entries for disposal of plant assets.
    (SO 6)

    Presented below are selected transactions at Thomas Company for 2006.
    Jan. 1 Retired a piece of machinery that was purchased on January 1, 1996. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.

    June 30 Sold a computer that was purchased on January 1, 2003. The computer cost $35,000. It had a useful life of 5 years with no salvage value. The computer was sold for $12,000.

    Dec. 31 Discarded a delivery truck that was purchased on January 1, 2002. The truck cost $33,000. It was depreciated based on a 6-year useful life with a $3,000 salvage value.

    Instructions
    Journalize all entries required on the above dates, including entries to update depreciation, where applicable, on assets disposed of. Thomas Company uses straight-line depreciation. (Assume depreciation is up to date as of December 31, 2005.)

    E10-8 Prepare adjusting entries for amortization.
    (
    The following are selected 2006 transactions of Yosuke Corporation.
    Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite.
    May 1 Purchased for $60,000 a patent with an estimated useful life of 5 years and a legal life of 20 years
    Instructions
    Prepare necessary adjusting entries at December 31 to record amortization required by the events above.

    © BrainMass Inc. brainmass.com June 3, 2020, 8:44 pm ad1c9bdddf
    https://brainmass.com/business/finance/plant-assets-disposal-and-amortization-of-goodwill-150555

    Attachments

    Solution Preview

    E10-6 Journalize entries for disposal of plant assets.
    (SO 6)

    Presented below are selected transactions at Thomas Company for 2006.
    Jan. 1 Retired a piece of machinery that was purchased on January 1, 1996. The machine cost $62,000 on that date. It had a useful life of 10 years with no salvage value.

    June 30 Sold a computer that was purchased on January 1, 2003. The computer cost $35,000. It had a useful life of 5 years with no salvage value. The computer was sold for $12,000.

    Dec. 31 Discarded a delivery truck that was ...

    Solution Summary

    The solution has two problems - one relating to disposal of plant assets by Thomas Company and the other relating to amortization of goodwill and patent of Yosuke Corporation

    $2.19

    ADVERTISEMENT