As the recently appointed auditor for William J. Bryan Corporation, you have bee
ID: 2496643 • Letter: A
Question
As the recently appointed auditor for William J. Bryan Corporation, you have been asked to examine selected accounts before the 6-month financial statements of June 30, 2014, are prepared. The controller for William J. Bryan Corporation mentions that only one account is kept for intangible assets. The account is shown below.
Intangible Assets
Debit
Credit
Balance
Prepare the entry or entries necessary to correct this account. Assume that the patent has a useful life of 10 years. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
(To correct the account)
(To record amortiztion expense)
Intangible Assets
Debit
Credit
Balance
Jan. 4 Research and development costs 937,150 937,150 Jan. 5 Legal costs to obtain patent 74,400 1,011,550 Jan. 31 Payment of 7 months’ rent on property leased by Bryan 84,560 1,096,110 Feb. 11 Premium on common stock 233,790 862,320 March 31 Unamortized bond discount on bonds due March 31, 2034 124,800 987,120 April 30 Promotional expenses related to start-up of business 211,040 1,198,160 June 30 Operating losses for first 6 months 254,890 1,453,050Explanation / Answer
Unamortized bond discount on bonds Dr $124,800
Promotional expenses Dr $211,040
Payment of 7 months’ rent on property Dr $84,560
Operating losses for first 6 months Dr $254,890
To Intangible Assets A/c $441,500
To Premium on common stock A/c $233,790
(To Correct the amount)
Amortisation Expense A/c $101,155
To Intangible Asset A/c $101,155
(To Record amortisation expense)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.