Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were impro perly recorded by the Neitzke Corporation in 2012.
| 1. |
Neitzke developed a new manufacturing process, incurring research and development costs of $197,500. The company also purchased a patent for $59,400. In early January Neitzke capitalized $256,900 as the cost of the patents. Patent amortization expense of $12,845 was recorded based on a 20-year useful life. |
| 2. |
On July 1, 2012, Neitzke purchased a small company and as a result acquired goodwill of $83,940. Neitzke recorded a half-year's amortization in 2012 based on a 40-year life.The goodwill has an indefinite life. |
Prepare all journal entries necessary to correct any errors made during 2012. Assume the books have not yet been closed for 2012.