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. Required:1.Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.2.Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. Refer to the Chart of Accounts for exact wording of account titles. 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. CHART OF ACCOUNTSGeneral Ledger ASSETS110Cash111Petty Cash112Accounts Receivable114Interest Receivable115Notes Receivable116Merchandise Inventory117Supplies119Prepaid Insurance120Land123Vehicles124Accumulated Depreciation-Vehicles125Equipment126Accumulated Depreciation-Equipment130Timber Rights131Accumulated Depletion132Goodwill133Patents LIABILITIES210Accounts Payable211Salaries Payable213Sales Tax Payable214Interest Payable215Notes Payable EQUITY310Common Stock311Retained Earnings312Dividends REVENUE410Sales610Interest Revenue620Gain on Sale of Vehicles621Gain on Sale of Equipment622Gain on Sale of Timber Rights623Gain from Sale of Goodwill EXPENSES510Cost of Merchandise Sold520Salaries Expense521Advertising Expense522Depreciation Expense-Vehicles523Delivery Expense524Repairs and Maintenance Expense529Selling Expenses531Rent Expense532Depreciation Expense-Equipment533Depletion Expense534Amortization Expense-Patents535Insurance Expense536Supplies Expense539Miscellaneous Expense710Interest Expense720Loss on Sale of Vehicles721Loss on Sale of Equipment722Loss on Sale of Timber Rights723Loss from Impaired Goodwill 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.PAGE 1 JOURNALACCOUNTING EQUATION DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 Adjusting Entries 2 3 b. On December 31, the company determined that $3,750,000 of goodwill was impaired.PAGE 2 JOURNALACCOUNTING EQUATION DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 Adjusting Entries 2 3 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.PAGE 3 JOURNALACCOUNTING EQUATION DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 Adjusting Entries 2 3

Answered: Image /qna-images/answer/01a34b03-a159-4e51-b37a-af209c96e697.jpg

Answered: 1. Determine the amount of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

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.

Required:

1.	Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items.
2.	Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. Refer to the Chart of Accounts for exact wording of account titles.

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.

CHART OF ACCOUNTSGeneral Ledger

	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	Vehicles
124	Accumulated Depreciation-Vehicles
125	Equipment
126	Accumulated Depreciation-Equipment
130	Timber Rights
131	Accumulated Depletion
132	Goodwill
133	Patents

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends

	REVENUE
410	Sales
610	Interest Revenue
620	Gain on Sale of Vehicles
621	Gain on Sale of Equipment
622	Gain on Sale of Timber Rights
623	Gain from Sale of Goodwill

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Vehicles
523	Delivery Expense
524	Repairs and Maintenance Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Equipment
533	Depletion Expense
534	Amortization Expense-Patents
535	Insurance Expense
536	Supplies Expense
539	Miscellaneous Expense
710	Interest Expense
720	Loss on Sale of Vehicles
721	Loss on Sale of Equipment
722	Loss on Sale of Timber Rights
723	Loss from Impaired Goodwill

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.

PAGE 1

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

b. On December 31, the company determined that $3,750,000 of goodwill was impaired.

PAGE 2

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

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.

PAGE 3

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 10 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.