The general journal of Kevin Berry Industries included the following entries relating to various expenditures during 20X5. Review this information and prepare corresponding entries to record any necessary straight-line amortization or other impairment for the year ending December 31.
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GENERAL JOURNAL
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Date
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Accounts
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Debit
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Credit
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1-Jan
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Patent
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30,000
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Cash
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30,000
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Acquired a patent from an inventor. The patent has a 15-year remaining legal life, but it is expected that Berry will utilize the patent for only 5 years.
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15-May
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Research Expense
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12,000
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Cash
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12,000
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Incurred costs in research and development activity. It is possible these costs will result in new product with a 48-month life.
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1-Sep
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Inventory
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25,000
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Building
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75,000
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Goodwill
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50,000
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Cash
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150,000
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To record purchase of business, expected to be operated successfully for an indefinite number of future years.
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20-Dec
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Copyright
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10,000
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Cash
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10,000
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Purchased copyright to a video production, but concluded that it was worthless by year's end.
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