For Each of the Following Unrelated Transactions, (A) Determine the Amount

question 222

Essay

For each of the following unrelated transactions, (a) determine the amount of the amortization or depletion expense for the current year, and (b) present the adjusting entries required to record each expense at year end.
(1) Timber rights were purchased on a tract of land for $360,000. The timber is estimated at 1,200,000 board feet. During the current year, 75,000 board feet of timber were cut and sold.
(2) Costs of $14,000 were incurred on January 1 to obtain a patent. Shortly thereafter, $28,000 was spent in legal costs to successfully defend the patent against competitors. The patent has an estimated legal life of 12 years.

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Definitions:

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to widespread unemployment and poverty.

Modernist American Art

A movement in American art that aimed to break away from traditional styles, embracing new techniques and perspectives to express modern life.

Gertrude Vanderbilt Whitney

An American sculptor, art patron, and collector, known for founding the Whitney Museum of American Art in New York City.

African Art

Artistic expressions originating from the African continent, characterized by diverse styles and mediums, reflecting the richness and diversity of African cultures.