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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.


Definitions:

Time-Value

Refers to the concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Monetary Compensation

Payment provided to employees or workers in the form of money for their services or labor.

Labor Time

The duration of time workers spend performing their duties to produce goods or provide services.

No Further Deposits

A situation or condition where no additional deposits or contributions are allowed.

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