Ex. 291
On January 2, 2014, Milroy Company purchased a patent for $280,000. The patent has an 8-year estimated useful life and a legal life of 20 years.
Instructions
Prepare the journal entry to record patent amortization.
Ex. 292
For each item listed below, enter a code letter in the blank space to indicate the allocation terminology for the item. Use the following codes for your answer:
A—AmortizationP—Depletion
D—DepreciationN—None of these
1. __Goodwill____ 7.Timberlands
2.___Land____8. Franchises (indefinite life)
3.___Buildings____ 9.Licenses (limited life)
4.___Patents____ 10.Land Improvements
5.___Copyrights____ 11.Oil Deposits
6.___Research Costs____ 12.Equipment
4.A 8. N 12. D