(solution) During the current year, the accountant for the Cartwright Corpo

(solution) During the current year, the accountant for the Cartwright Corpo

During the current year, the accountant for the Cartwright Corporation recorded numerous transactions in an account labeled Intangibles as follows: Jan. 2 Incorporation fees $17,500 Jan. 10 Legal fees for the organization of the company 7,500 Jan. 25 Paid for large-scale advertising campaign for the year 15,000 Apr. 1 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 June 30 Filed for a patent 10,000 July 1 Operating loss for first six months of the year 12,000 Dec. 11 Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for two years, after which it will have no residual value. 12,000 Dec. 31 Paid employees involved in R&D 30,000 Required Prepare adjusting journal entries to eliminate the Intangibles account and correctly record all the items. The company amortizes patents over 10 years.