Data related to the acquisData related to the acquisition of timber rights and i

Question

Data related to the acquisData 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 $1,762,820 on February 22. The stand of timber is estimated at 4,639,000 board feet. During the current year, 1,068,200 board feet of timber were cut and sold. B. On December 31, the company determined that $4,015,000 of goodwill was impaired. C. Governmental and legal costs of $6,846,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 10 years. Amortization is to be for three-fourths of a year. ition of timber rights and intangible assets

Explanation / Answer

Answer:

A.

B. Loss on impairment of goodwill=$4015000

c.

Cost on rights of a track on land = 1,762,820 Estimated stand of timber = 4,639,000 board feet Depletion = cost of rights on land/ Estimated timber = 0.38 board feet Current year depletion charges = 0.38 x 1068,200 board feet = 405916

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