Reference no: EM132805249

Question - Prepare the required adjusting journal entry at 31 December 2019, the end of the annual accounting period for the three items below. Assume that no adjusting entries have been made during the year. If no entry is required, explain why.

a. Polk Company acquired a patent that cost RM6,000 on January 1, 2019. The patent was registered on January 1, 2015. The useful life of a patent is 20 years from registration.

b. Polk Company acquired a gravel pit on January 1, 2019, that cost RM24,000. The company estimates that 30,000 tons of gravel can be extracted economically. When all the gravel has been extracted, no residual value is anticipated. During 2019, 4,000 tons were extracted and sold.

c. On January 1, 2019, Polk Company acquired a used dump truck that cost RM6,000 to use hauling gravel. The company estimated a residual value of 10% of cost and a useful life 4 years. The company uses straight-line depreciation.