For each of the following unrelated transactions, (1) Timber rights were purchased on a tract of land for $480,000. The timber is estimated at 1,200,000 board feet. During the current year, 75.000 board feet of timber were cut and sold. (2) Costs of $8.000 were incurred on January 1 to obtain a patent. Shortly thereafter, $22,000 was spent in legal costs to successfully defend the patent against competitors. The patent has an estimated legal life of 12 years. Determine the amount of the amortization expense or depletion for the current year. (1) Amount of for the current year for timber (2) Amount of the for the current year for patents %24

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Present the adjusting entries required to record each expense at year end. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
No. Account Titles and Explanation
Debit
Credit
(1)
(2)
Transcribed Image Text:Present the adjusting entries required to record each expense at year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Account Titles and Explanation Debit Credit (1) (2)
For each of the following unrelated transactions,
(1)
Timber rights were purchased on a tract of land for $480,000. The timber is estimated at 1,200,000 board feet. During the
current year, 75,000 board feet of timber were cut and sold.
(2)
Costs of $8.000 were incurred on January 1 to obtain a patent. Shortly thereafter, $22,000 was spent in legal costs to
successfully defend the patent against competitors. The patent has an estimated legal life of 12 years.
Determine the amount of the amortization expense or depletion for the current year.
(1) Amount of
for the current year for timber
%24
(2) Amount of the
v for the current year for patents
%24
Transcribed Image Text:For each of the following unrelated transactions, (1) Timber rights were purchased on a tract of land for $480,000. The timber is estimated at 1,200,000 board feet. During the current year, 75,000 board feet of timber were cut and sold. (2) Costs of $8.000 were incurred on January 1 to obtain a patent. Shortly thereafter, $22,000 was spent in legal costs to successfully defend the patent against competitors. The patent has an estimated legal life of 12 years. Determine the amount of the amortization expense or depletion for the current year. (1) Amount of for the current year for timber %24 (2) Amount of the v for the current year for patents %24
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