Question;Correct Classi?cation of Intangibles During the current year, Cartwright Corporation?s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows:Jan. 2 Paid incorporation fees. $17,50011 Paid legal fees for the organization of the company. 7,50025 Paid for large-scale advertising campaign for the year. 15,000Apr. 1 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. 35,000May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000June 30 Paid expenses related to obtaining a patent. 10,000Dec. 11 Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for 2 years, after which it will have no residual value. 12,00031 Paid salaries of employees involved in R&D. 30,000Required:Prepare adjusting journal entries to eliminate the Intangible Assets account and correctly record all the items. Cart-wright amortizes patents over 10 years.
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