P10-8B Due to rapid turnover in the accounting department, a number of transactions involving
intangible assets were improperly recorded by Duby Company in 2008.
1. Duby developed a new manufacturing process, incurring research and development costs of
$95,000.The company also purchased a patent for $40,000. In early January, Duby capitalized
$135,000 as the cost of the patents. Patent amortization expense of $6,750 was recorded based
on a 20-year useful life.
2. On July 1, 2008, Duby purchased a small company and as a result acquired goodwill of
$80,000. Duby recorded a half-year’s amortization in 2008, based on a 50-year life ($800 amortization).
The goodwill has an indefinite life.
Instructions
Prepare all journal entries necessary to correct any errors made during 2008. Assume the books
have not yet been closed for 2008.
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