Prepare all journal entries necessary to correct any errors

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Question - Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Farnsworth Company in 2014.

1. Farnsworth developed a new manufacturing process, incurring research and development costs of $110,000. The company also purchased a patent for $50,000. In Early January, Farnsworth capitalized $160,000 as the cast of the patents. Patent amortization expense of $16,000 was recorded based on a 10- year useful life.

2. On July 1, 2014, Farnsworth purchased a small company and as a result acquired good will of $200,000. Farnsworth recorded a half- year's amortization in 2014, based on a 50-year life ($2,000 amortization). The goodwill has an indefinite life.

Required - Prepare all journal entries necessary to correct any errors made during 2014. Assume the books have not yet been closed for 2014.

Reference no: EM132247007

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