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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.

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.

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