Below are several transactions for McLaughlin Inc.
1. Timber rights were purchased on a tract of land for $600,000. The timber is estimated at 2,800 cubic metres. During the current year, 180 cubic metres of timber were cut and sold.
2. A company purchased another company on July 1 and recorded goodwill of $400,000.
3. Costs of $18,000 were incurred on January 1 to obtain a patent. Shortly thereafter, $9,000 was spent in legal costs to successfully defend the patent against competitors. The patent has a legal life of 20 years and an estimated 9-year useful life.
4. The company acquired a trademark for the cost of $25,000. The trademark has 20 years until it expires and then it can be renewed for another 20 years for the cost of $25.
Instructions
For each of the unrelated transactions, determine the amount of the depreciation expense for the current year and present the adjusting entries required to record each expense at year end.

Question

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The Answer of Below are several transactions for McLaughlin Inc.
1. Timber rights were purchased on a tract of land for $600,000. The timber is estimated at 2,800 cubic metres. During the current year, 180 cubic metres of timber were cut and sold.
2. A company purchased another company on July 1 and recorded goodwill of $400,000.
3. Costs of $18,000 were incurred on January 1 to obtain a patent. Shortly thereafter, $9,000 was spent in legal costs to successfully defend the patent against competitors. The patent has a legal life of 20 years and an estimated 9-year useful life.
4. The company acquired a trademark for the cost of $25,000. The trademark has 20 years until it expires and then it can be renewed for another 20 years for the cost of $25.
Instructions
For each of the unrelated transactions, determine the amount of the depreciation expense for the current year and present the adjusting entries required to record each expense at year end.

Below Are Several Transactions for McLaughlin Inc