During the current year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows:Prepare adjusting journal entries to eliminate the Intangible Assets account and correctly record all the items, including appropriate amortization adjustments. Cartwright amortizes patents over 10 years. Paid incorporation fees.11Paid legal fees for the organization of the company.25Paid for large-scale advertising campaign for the year.$17,5007,50015,000Jan.2Acquired land for $15,000 and a building for $20,000 to house the R&D activities. Thebuilding has a 20-year life.Apr. 135,000May 15Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left atthe end of the year and will be used in the same project next year. (They have noalternative use.)15,00010,000June 30Paid expenses related to obtaining a patent.Purchased an experimental machine from an inventor. The machine is expected to be usedfor a particular R&D activity for 2 years, after which it will have no residual value.Dec. 11Paid salaries of employees involved in R&D.12,00030,00031

According to the logic of a journal entry, every business transaction should be documented in at…

Answered: Paid incorporation fees. 11 Paid legal…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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During the current year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows:

Prepare adjusting journal entries to eliminate the Intangible Assets account and correctly record all the items, including appropriate amortization adjustments. Cartwright amortizes patents over 10 years.

Paid incorporation fees.
11
Paid legal fees for the organization of the company.
25
Paid for large-scale advertising campaign for the year.
$17,500
7,500
15,000
Jan.
2
Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The
building has a 20-year life.
Apr. 1
35,000
May 15
Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at
the end of the year and will be used in the same project next year. (They have no
alternative use.)
15,000
10,000
June 30
Paid expenses related to obtaining a patent.
Purchased an experimental machine from an inventor. The machine is expected to be used
for a particular R&D activity for 2 years, after which it will have no residual value.
Dec. 11
Paid salaries of employees involved in R&D.
12,000
30,000
31

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