Company X developed a highly innovative product and began exporting it. Both domestic and international markets became aware of
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<u>Solution and Explanation:</u>
1 Amount of depletion, impairment and amortization for the current year
A Cost of timber rights on a tract of land $3,461,120
Estimated stand of timber 5,408,000
Cost of depletion per board feet (3461120 divided by 5408000) $0.64
Current year depletion charges for 1,028,300 board feet $658,112
B Impairment loss $3,640,000
C Cost of Patent $6,108,000
Estimated economic life 10 years
Amortization period 3/4
Amortization $458,100
2 <u>Adjusting entries </u>
Account Titles Debit Credit
a Depletion expense $658,112
Accumulated depletion $658,112
b Loss from Impaired Goodwill $3,640,000
Goodwill $3,640,000
c Amortization expense-Patents $458,100
Patents $458,100