Chapter 10, Problem 10.8BPE

a.

To determine

Intangible Assets: These are the long-term assets having no physical existence. However, the benefits provided by these assets are used by the company for a long period of time. Example: Patent, Trademark, Goodwill, Copyrights.

Amortization: Itis the process of allocating the value of the intangible assets over its definite useful life.

Impairment of Goodwill: It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value.

To Journalize: an adjusting entry on December 31 for impaired goodwill.

b.

To determine

To Journalize: an adjusting entry on December 31 for the amortization of the patent rights.