Due to rapid employee turnover in the accounting department, the following transactions involving were improperly recorded by Inland Corporation.
1. Inland developed a new manufacturing process, incurring research and development costs of $160,000. The company also purchased a patent for $40,000. In early January, Inland capitalized $200,000 as the cost of the patents. Patent amortization expense of $10,000 was recorded based on a 20-year useful life.
2. On July 1, 2022, Inland purchased a small company and as a result recorded of $80,000. Inland recorded a half-year’s amortization in 2022, based on a 20-year life ($2,000 amortization). The has an indefinite life.
Instructions
Prepare all journal entries necessary to correct any errors made during 2022. Assume the books have not yet been closed for 2022.
