Exercise 9-1:1 These are selected 2017 transactions for Bramble Corporation: Jan
ID: 2522664 • Letter: E
Question
Exercise 9-1:1 These are selected 2017 transactions for Bramble Corporation: Jan. 1 Purchased a copyright for $225,050. The copyright has a useful life of 7 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 $60,600. Sept. 1 Purchased a small company and recorded goodwill of $150,300. Its useful life is indefinite. Prepare all adjusting entries at December 31 to record amortization required by the events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) 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) Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LTNK TO TEXTExplanation / Answer
Jan. 1 (Copyright purchase)
Copyright A/C Dr 2,25,050
Cash A/C Cr 2,25,050
(Purchase of Copyright for 225050)
March. 1
Patents A/C Dr 606,00
Cash A/C Cr 60,600
(Patents purchase on Cash for Rs. 60,600)
Sept. 1
Goodwill A/C Dr 1,50,300
Cash A/C Cr 1,50,300
Dec. 31 (Copyright Amortization)
Copyrights Amortization A/C Dr 32,150
Copyright A/C Cr 32,150
(Amortization calculation Actual Purchase Price/No. of Useful years = 225050/7 = 32,150)
Dec. 31 (Amortization of Patents)
Patents Amortization A/C Dr 10100
Patents A/C Cr 10100
(Patents Amortization Calculation 60600/5 Years = 12120 for One year. So 12120/12 = 1010 per Month. Total March to Dec 10 Month = 1010*10 = 10100 Actual Amortization).
As Goodwill has idefinite useful life Amortization not required to be recorder.
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