On December 31, it was estimated that goodwill of $4,097,100 was impaired. In ad

Question

On December 31, it was estimated that goodwill of $4,097,100 was impaired. In addition, a patent with an estimated useful economic life of 14 years was acquired for $902,496 on August 1.

Required: 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.

Explanation / Answer

**Amortisation for year = cost /useful life

          = 902496/14 = 64464

Date Account debit credit December 31 Impairment loss 4,097,100 Goodwill 4,097,100 [Being impairment loss recorded] December 31 Amortisation expense 26860 Accumulated amortisation -patent 26860 [being amortisation for the period 1 aug-31 dec recorded][64464*5/12]

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