P9-8B_Rectification of errors

P9-8B Due to rapid turnover in the accounting department, a number of transactions involving

intangible assets were improperly recorded by Wasp Company in 2011.

1. Wasp developed a new manufacturing process, incurring research and development costs of

$110,000.The company also purchased a patent for $50,000. In early January, Wasp capitalized

$160,000 as the cost of the patents. Patent amortization expense of $8,000 was recorded based

on a 20-year useful life.

2. On July 1, 2011, Wasp purchased a small company and as a result acquired goodwill of

$200,000.Wasp recorded a half-year’s amortization in 2011, based on a 50-year life ($2,000

amortization).The goodwill has an indefinite life.

Instructions

Prepare all journal entries necessary to correct any errors made during 2011. Assume the books

have not yet been closed for 2011.