Reporting and Analyzing Long-Lived Assets

Journal Entries for sale of plant assets:

Transaction Description Journal Entry Account Title Debit Credit

Adjusting Entry to bring accumulated depreciation to current date

Depreciation Expense Accumulated Depreciation-asset title Accumulated Depreciationasset title Cash Asset Title Gain on Disposal Accumulated Depreciation-asset title Cash Loss on Disposal Asset Title Accumulated Depreciationasset title Asset Title

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

To record the sale of an asset with a gain

To record the sale of an asset with a loss

To record the retirement of an asset where the asset is fully depreciated

Accumulated Depreciationasset title XXX To record the retirement of an asset where there is either a salvage value or Loss on disposal XXX the asset has not been fully depreciated Asset Title XXX Note: Asset title should be replaced with the title of the asset. Depreciation must always be brought up to current before an asset is disposed of during the year.

Journal Entries for Purchase of Intangible Assets:

Transaction Description Journal Entry Account Title Debit Credit

To record the purchase of a patent

Patent Cash Franchise Cash Copyright Cash Trademark Cash Research and Development Expense Cash

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Page 1

To record the purchase of a Franchise

To record the purchase of a Copyright To record the purchase of a Trademark or Trade name To record research and development cost MJC Revised 10-2011

Reporting and Analyzing Long-Lived Assets

Journal Entries for Purchase of Intangible Assets Continued:
Transaction Description Journal Entry Account Title Debit Credit

Goodwill XXX Cash XXX Research and development cost are to be treated not as an intangible asset but only as an expense. To record the acquisition of goodwill

Journal Entries for Amortization of Intangible Assets:

Transaction Description Journal Entry Account Title Debit Credit

To record the amortization of a patent

Amortization ExpensePatent Patent Amortization ExpenseFranchise Franchise Amortization ExpenseCopyright Copyright Amortization ExpenseTrademark Trademark

XXX XXX XXX XXX XXX XXX XXX XXX

To record the amortization of a Franchise To record the amortization of a Copyright To record the amortization of a Trademark or Trade Name To record impairment of Goodwill

Loss ImpairmentGoodwill XXX Goodwill XXX Note: Research and development costs are an expense; therefore, those costs cannot be amortized. Goodwill will only be decreased for any impairment to its market value. Goodwill will never be increased in value due to an increase in its market value.

MJC Revised 10-2011

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