Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Goins Company in 2017. 1. Goins developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $60,000. In early January, Goins capitalized $196,000 as the cost of the patents. Patent amortization expense of $19,600 was recorded based on a 10-year useful life. 2. On July 1, 2017, Goins purchased a small company and as a result acquired goodwill of $92,000. Goins recorded a half-year’s amortization in 2017, based on a 50-year life ($920 amortization). The goodwill has an indefinite life. Prepare all journal entries necessary to correct any errors made during 2017. Assume the books have not yet been closed for 2017
Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Goins Company in 2017. 1. Goins developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $60,000. In early January, Goins capitalized $196,000 as the cost of the patents. Patent amortization expense of $19,600 was recorded based on a 10-year useful life. 2. On July 1, 2017, Goins purchased a small company and as a result acquired goodwill of $92,000. Goins recorded a half-year’s amortization in 2017, based on a 50-year life ($920 amortization). The goodwill has an indefinite life. Prepare all journal entries necessary to correct any errors made during 2017. Assume the books have not yet been closed for 2017
Chapter1: Financial Statements And Business Decisions
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Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Goins Company in 2017.
| 1. | Goins developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $60,000. In early January, Goins capitalized $196,000 as the cost of the patents. Patent amortization expense of $19,600 was recorded based on a 10-year useful life. | |
| 2. | On July 1, 2017, Goins purchased a small company and as a result acquired |
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