question archive The general journal of Kevin Berry Industries included the following entries relating to various expenditures during 20X5
Subject:AccountingPrice: Bought3
The general journal of Kevin Berry Industries included the
following entries relating to various expenditures during 20X5. Review this information and prepare
corresponding entries to record any necessary straight-line amortization or
other impairment for the year ending December 31.
GENERAL JOURNAL
Date
Accounts
Debit
Credit
01-Jan
Patent
30,000
Cash
30,000
Acquired
a patent from an inventor. The patent
has a 15-year remaining legal life, but it is expected that Berry will
utilize the patent for only 5 years.
15-May
Research
Expense
12,000
Cash
12,000
Incurred
costs in research and development activity.
It is possible these costs will result in new product with a 48-month
life.
01-Sep
Inventory
25,000
Building
75,000
Goodwill
50,000
Cash
150,000
To
record purchase of business, expected to be operated successfully for an
indefinite number of future years.
20-Dec
Copyright
10,000
Cash
10,000
Purchased
copyright to a video production, but concluded that it was worthless by
year’s end.