a. Determine the amount of depletion expense for the current year.
b. Journalize the adjusting entry to recognize the depletion expense.
Answer:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiENv0igpHtNuLAwfiuvmEyO7bhPx_93koh9Y1clP5rCZ7xBuY8fbNYw_gXPntOt0ivAIm7OIndwPeJgooWP8g0aFq9PFCrc_-cn1bf5m1cVkhMFUldpSjg6RDxVVy97Q9_8ofAPmCgiXt3/s400/Ex.+10%25E2%2580%259319.png)
a. $21,750,000 ÷ 15,000,000 tons = $1.45 depletion per ton
3,600,000 tons × $1.45 = $5,220,000 depletion expense
b.
Depletion Expense 5,220,000
Accumulated Depletion 5,220,000
Depletion of mineral deposit.
Voss Company acquired patent rights on January 6, 2011, for $480,000. The patent has a useful life equal to its legal life of eight years. On January 3, 2014, Voss successfully defended the patent in a lawsuit at a cost of $80,000.
a. Determine the patent amortization expense for the current year ended December 31, 2014.
b. Journalize the adjusting entry to recognize the amortization.
Answer:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8PZBoWGB_cklkEKqEMDDpaJTlj6oW680ABtyAzZseAuZii8Xmk6L7dqtgDbOy6jVmM2IRWSNpiTbkAerOBzt4GpTAMX71pAZjtdr_pU3n4AWuosYWScUjIi5-i5IA6PVHX1E-fDKpe2wI/s400/Ex.+10%25E2%2580%259320.png)
a. ($480,000 ÷ 8) + ($80,000 ÷ 5) = $76,000 total patent expense
b.
Amortization Expense—Patents 76,000
Patents 76,000
Amortized patent rights ($60,000 + $16,000).
No comments:
Post a Comment