Financial and Managerial Accounting: P9-6B Data related to the acquisition of timber rights
Financial and Managerial Accounting Problem 9-6B Amortization and depletion entries Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. Timber rights on a tract of land were purchased for $1,170,000 on July 5. The stand of timber is established at 4,500,000 board feet. During the current year, 1,370,000 board feet of timber were cut and sold. b. On December 31, the company determined that $5,000,000 of goodwill was impaired. c. Governmental and legal costs of $234,000 were incurred on April 4 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year.Instruction: 1. Determine the amount of the amortization, depletion or impairment for the current year for each of the foregoing items. a. Timber rights: b. Goodwill: c. Patent: 2. Journalize the adjusting entries required to record the amortization, depletion or impairment for each item.