During the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows: Jan. 2 Paid incorporation fees. $17,500 11 Paid legal fees for the organization of the company. 7,500 25 Paid for large-scale advertising campaign for the year. 15,000 Apr. 1 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 June 30 Paid expenses related to obtaining a patent. 10,000 Dec. 11 Purchased an experimental machine from an inventor. The machine is expected to be used for multiple projects over a course of 10 years, after which it will have a residual value of $1,000. 12,000 31 Paid salaries of employees involved in R&D. 30,000 Question Assuming that Cartwright amortizes patents over 12 years and uses Straight-Line depreciation for depreciable assets, the journal entries to eliminate the Intangible Assets account and correctly record all items, including amortization and depreciation would include: Debit to Depreciation Expense - Equipment for $1,100 Credit to Patent for $10,000 Credit to R&D Expense for $10,000 Debit to Intangible Assets of $30,000

During the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows: Jan. 2 Paid incorporation fees. $17,500 11 Paid legal fees for...

During the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows:

Jan. 2	Paid incorporation fees.	$17,500
11	Paid legal fees for the organization of the company.	7,500
25	Paid for large-scale advertising campaign for the year.	15,000
Apr. 1	Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life.	35,000
May 15	Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.)	15,000
June 30	Paid expenses related to obtaining a patent.	10,000
Dec. 11	Purchased an experimental machine from an inventor. The machine is expected to be used for multiple projects over a course of 10 years, after which it will have a residual value of $1,000.	12,000
31	Paid salaries of employees involved in R&D.	30,000

Question

Assuming that Cartwright amortizes patents over 12 years and uses Straight-Line depreciation for depreciable assets, the journal entries to eliminate the Intangible Assets account and correctly record all items, including amortization and depreciation would include:

		Debit to Depreciation Expense - Equipment for $1,100
		Credit to Patent for $10,000
		Credit to R&D Expense for $10,000
		Debit to Intangible Assets of $30,000

Jun 01, 2022

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During the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows: Jan. 2 Paid incorporation fees. $17,500 11 Paid legal fees for...

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