Chapter 10, Problem 10.13E

To determine

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Goodwill: Goodwill refers to an intangible asset which does not have any physical presence but consists of the qualitative attributes that enhances the value of any business organization

Franchises: It refers to the contract which provides the right to franchisee under which he can sell specific products and render various services by utilization of trademarks granted by franchisor.

Research and Development Cost: Research and development cost refers to that cost which is incurred by an organization in the process of developing a new product.

Amortization: Amortization refers to the amount of depreciation expense charged on an intangible asset. Amortization results in the decreased value of an intangible asset.

Intangible Assets: Intangible assets refer to those assets owned by the organization which do not have a physical appearance but are used to generate a value for the business.

Balance sheet: The balance sheet of a Company is the one of the most important financial statements because it shows the financial position of the Company.

Main components of balance sheet are assets, liabilities and stockholder’s equity are as expressed as in the following equation:

$\text{Assets }=\text{ Liabilities}+\text{Stockholders' equity}$

To Prepare: The journal entries for given transactions, adjusting entries on December 31, 2017, journal entries for amortization and accurate balances.