These are selected 2014 transactions for Amarista Corporation: Jan. 1 Purchased
ID: 2446093 • Letter: T
Question
These are selected 2014 transactions for Amarista Corporation: Jan. 1 Purchased a copyright for $128,820. The copyright has a useful life of 6 years and a remaining legal life of 33 years. Mar. 1 Purchased a patent with an estimated useful life of 5 years and a legal life of 25 years for $104,400. Sept. 1 Purchased a small company and recorded goodwill of $154,620. Its useful life is indefinite. Prepare all adjusting entries at December 31 to record amortization required by the events. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 (To record amortization of Copyrights) Dec. 31 (To record amortization of Patents) Dec. 31 (To record amortization of Goodwill)
Explanation / Answer
Date Acciount title / explanations Debit Credit
31-12-2014 Amortization Ac Dr 21,470
To Copyright 21,470
(Being copyright amortised over useful life of 6 years
128,820/6 )
31-12-2014 Amortization Ac Dr 17,400
To Patent 17,400
(Being patent amortised over useful life of 5 years
104,400*10/60)
Goodwiil : No Entry
Since good will having indefinite life and the indication of any impairment is given no need to amortise the same.
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