Amortization Expense Smith& Sons obtained a patent for a new optical scanning de

Question

Amortization Expense Smith& Sons obtained a patent for a new optical scanning device. The fees incurred to file for the patent and to defend the patent in court against several companies which challenged the patent amounted to $45,000. Smith & Sons concluded that the expected economic ifte of the patent was 12 years Calculate the amortization expense that should be recorded in the second year and record the journal entry for the amortization expense on the books of Smith & Sons. $ General Journal Debit Credit Description

Explanation / Answer

Answer = 1 Value of the patent = $                         45,000 Divide By "/"By Life of the patens 12 Year Amoritzation per year = $                            3,750 Amortization expenses of the year 2 = $                            3,750 Journal Entries Date ACCT Title and explanation Debit Credit Amortization Expenses $3,750         To Patent $3,750 (To Record the expenses of patent ) Answer = 2 Goodwill impairnment = $ 80 Million - $ 50 Million = 30 Million Journal Entries Date ACCT Title and explanation Debit (in Million) Credit (In Million) Loss of Goodwill Impairment $30         To Goodwill $30 (To Record the Goodwill impairnment)

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