Ask Question
30 March, 00:54

On December 31, it was estimated that goodwill of $6,000,000 was impaired. In addition, a patent with an estimated useful economic life of 12 years was acquired for $1,500,000 on April 1. A. Journalize the adjusting entry on December 31 for the impaired goodwill. Refer to the Chart of Accounts for exact wording of account titles. B. Journalize the adjusting entry on December 31 for the amortization of the patent rights. Refer to the Chart of Accounts for exact wording of account titles.

+5
Answers (1)
  1. 30 March, 01:58
    0
    loss on impairment X debit

    goodwill X credit

    patent expense 125,000 credit

    patent 125,000 credit

    Explanation:

    goodwill:

    the amount of the impaired is missing. However the entry will loss on impairment debit, because it is an expense

    and the goodwill will be credited, because the asset is decreasing

    patent:

    we will do amortization like it was the depreciation on a car, the diference will be that we on't use a contra-asset account (accumulated deperciation car) we will directly decrease patent account

    patent acquisition 1,500,000

    economic life 12

    purchase / economic life = striaght-line amortization

    1,500,000/12 = 125,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On December 31, it was estimated that goodwill of $6,000,000 was impaired. In addition, a patent with an estimated useful economic life of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers