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

question 264

Essay

For each of the following unrelated transactions (a) determine the amount of the amortization expense or depletion 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 $480000. The timber is estimated at 1200000 board feet. During the current year 75000 board feet of timber were cut and sold.
(2) Costs of $8000 were incurred on January 1 to obtain a patent. Shortly thereafter $22000 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:

Pyelonephritis

A type of urinary tract infection that has reached the kidney, potentially causing kidney damage.

Glomerulonephritis

An inflammation of the glomeruli, the small blood vessels in the kidneys, potentially leading to kidney damage and impairing kidney function.

Renal Cortex

is the outer part of the kidney that contains the kidney's filtration structures, known as nephrons, which are crucial for the process of removing waste from the blood and forming urine.

Collecting Ducts

The ducts in the kidneys that are responsible for the final concentration and transport of urine towards the ureters and bladder.