On December 31, It Was Estimated That Goodwill of $65,000

question 9

Essay

On December 31, it was estimated that goodwill of $65,000 was impaired. On July 1, a patent with an estimated useful economic life of 10 years was acquired for $60,000.
(a)Journalize the adjusting entry on December 31 for the impaired goodwill.
(b)Journalize the adjusting entry on December 31 for the amortization of the patent rights.

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Definitions:

Inspects Goods

The act of examining products for quality, safety, and compliance with specifications or regulations before acceptance.

Partially Destroyed

Refers to an item or property that has been significantly but not completely damaged or ruined.

Void Contract

An agreement that is invalid from the outset and has no legal force or effect, making it unenforceable by law.

Cure

A breaching party’s right to provide conforming goods when nonconforming goods were initially delivered; subject to a reasonable time test.