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Lecture 2

BADM*1060 Lecture Notes - Lecture 2: No EntryPremium

3 pages53 viewsSummer 2017

Department
Business
Course Code
BADM*1060
Professor
Howard Leaman
Lecture
2

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Chapter 9 Part B Intangible Assets
January 1st, 2016
Buy a Patent for $100,000
Estimated life: 10 years
July 1st, 2016, defend the Patent for $11,400
- Lose case journal entry: Impairment loss 100,000
Patent 100,000
Legal Expense 11,400
Cash 11,400
- Win case journal entry: Amortization Expense
Accumulated Amortization
Patent Amort Exp/year = cost est sal / est life
= $100,000/10 years
Defense Amort Exp/year = cost sal/life
=$11,400 0 / 9 ½ years
= $100/month
10,000
+ 6,000
$10,600
Goodwill
Company A Buy’s Company B for $80,000
Company B
- Assets $100,000
- Liabilities 30,000
- Net Worth $ 70,000
Goodwill = $10,000
CHAPTER 9 Part 2 Current Liabilities
1) On October 31, 2014, BADM1060 Inc. sold old delivery equipment for $20,000. The delivery
equipment was purchased on January 1, 2011, for $54,000 and was estimated to have a $6,000
residual value at the end of its 8-year life. Depreciation on the delivery equipment has been
recoded through December 31, 2013. Prepare the journal entry to record the disposal of the
delivery equipment given that he company uses the straight-line method of depreciation.
Depreciation Expense /year cost estimated salvage ÷ estimated life
54,000 6,000 = 48,000 ÷ 8 = 6,000/year Equipment
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