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Prepare Adjusting Journal Entries Dated December 31 of the Current

question 134

Essay

Prepare adjusting journal entries dated December 31 of the current year for the following independent situations.
a.Hops Corporation acquired several patents on March 1 of the current year for a total price of $48,000.The patents have an estimated remaining legal life of 15 years and an estimated useful,economic life of 8 years.
b.Goodwill amounting to $180,000 was purchased in a company acquisition on July 1 of the current year.The goodwill is believed to have an indefinite benefit.


Definitions:

NSF

An acronym for Non-Sufficient Funds, referring to a situation where a bank account does not have enough money to cover a presented check or withdrawal.

Monthly Service Charge

A fee charged by a financial institution or service provider on a monthly basis for the maintenance of an account or provision of a particular service.

Bank Reconciliation

The process of comparing and adjusting the bank statement balance with the book balance of a company to account for differences.

Petty Cash Account

A small fund kept on hand for incidental cash expenses, maintained through a system of documenting each withdrawal and replenishment.

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