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    Journal Errors Correction from 2007

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    Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Dische Corporation in 2007.
    1. Dische developed a new manufacturing process, incurring research and development costs of $150,000. The company also purchased a patent for $37,400. In early January Dische capitalized $187,400 as the cost of the patents. Patent amortization expense of $9,370 was recorded based on a 20-year useful life.
    2. On July 1, 2007, Dische purchased a small company and as a result acquired goodwill of $60,000. Dische recorded a half-year's amortization in 2007, based on a 40-year life ($740 amortization). The goodwill has an indefinite life.

    Instructions:
    Prepare all journal entries necessary to correct any errors made during 2007. Assume books have not yet been closed for 2007.

    © BrainMass Inc. brainmass.com March 4, 2021, 8:29 pm ad1c9bdddf
    https://brainmass.com/business/the-accounting-cycle/recording-problems-accounting-171275

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    Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Dische Corporation in 2007.
    1. Dische developed a new manufacturing process, incurring ...

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    This solution provides answers to various questions involving journal entries in accounting.

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