natural resources & intangible assets

natural resources are long-term assets such as ____, _____, and ____.

timber

minerals

oils

depletion

the process of transferring the cost of a natural resource to an expense account

how to calculate depletion (2 step)

step one: depletion rate

= cost of resource / estimated total units of resource

step two: depletion expense

= depletion rate x quantity removed

depletion expense

the expense account used when recording depletion

intangible assets are ______ assets used in operations that lack ____ ____

long-term, physical substance

examples of intangible assets

patents

copyrights

trademarks

goodwill

amortization

the process of transferring the cost of an intangible asset to an expense account

patent

gives exclusive rights to produce and sell goods or an invention.

JE to amortize a patent

DR amorization expense

CR patents

copyright

provides exclusive rights to publish and sell a literary, artistic, or musical work

trademark

a name, term, or symbol used to identify a business

trademarks are ____ amortized, but written off if ______

not, deteriorates in value

goodwill

when a business buys another business and pays more than the fair value of net assets

goodwill is ____ amortized, but is written off if ____

not, deteriorates

JE to record goodwill

DR loss from impaired goodwill

CR goodwill