Data related to the acquisition of timber rights and intangible
assets during the current year ended December 31 are as
follows:

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Question: Data related to the acquisition of timber rights and intangible assets during the current year en…
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A. Timber rights on a tract of land
were purchased for $3,180,540 on February 22. The stand of timber
is estimated at 5,214,000 board feet. During the current year,
1,125,600 board feet of timber were cut and sold.
B. On December 31, the company
determined that $4,023,000 of goodwill was impaired.
C.

Governmental and legal costs of $6,720,000 were incurred on
April 3 in obtaining a patent with an estimated economic life of 12
years. Amortization is to be for three-fourths of a year.

1. Determine the amount of the amortization, depletion, or
impairment for the current year for each of the items in the
Instructions.

A.
B.
C.

2. Journalize the transactions and the adjusting entries. Refer
to the Chart of Accounts for exact wording of account titles.
Scroll down to access pages 2 through 3 of the journal.

A. Timber rights on a tract of land were purchased for
$3,180,540 on February 22. The stand of timber is estimated at
5,214,000 board feet. During the current year, 1,125,600 board feet
of timber were cut and sold.

PAGE 1

JOURNAL

DATE
DESCRIPTION
POST.
REF.
DEBIT CREDIT

1

2

3

B. On December 31, the company determined that $4,023,000 of
goodwill was impaired.

PAGE 2

JOURNAL

DATE
DESCRIPTION
POST.
REF.
DEBIT CREDIT

1

2

3

C. Governmental and legal costs of $6,720,000 were incurred on
April 3 in obtaining a patent with an estimated economic life of 12
years. Amortization is to be for three-fourths of a year.

PAGE 3

JOURNAL

DATE
DESCRIPTION
POST.
REF.
DEBIT CREDIT

1

2

3

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