(17). Tahir Industries has the following patents on its December 31, 2021, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired $ 48,000 $ 19,200 $ 16,800 Patent A 3/1/18 20 years Patent B 7/1/19 10 years Patent C 9/1/20 8 years The following events occurred during the year ended December 31, 2022. (1). Research and development costs of $347,000 were incurred during the year. (2). Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 years. (3). As a result of reduced demands fo certain products protected by Patent B, a possible im airment of Patent B's value may have occurred at Decem ber 31, 2022. The controller for Tahir estimates the future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2023 $2,500 2024 2,500 2025 2,500 The discount rate to be used for these cash flows proper is 8%. (Assume that the cash flows occur at the end of the year.) (Annuity Factor @ 8% for 3 yrs = $2.57710) Instructions (a). Compute the total carrying amount of Tahir's patents on its December 31, 2021, balance sheet. (b). Compute the total carrying amount of Tahir's patents on its December 31, 2022, balance sheet.

(17). Tahir Industries has the following patents on its December 31, 2021, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired $ 48,000 $ 19,200 $ 16,800 Patent A 3/1/18 20 years Patent B 7/1/19 10 years Patent C 9/1/20 8 years The following events occurred during the year ended December 31, 2022. (1). Research and development costs of $347,000 were incurred during the year. (2). Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 years. (3). As a result of reduced demands fo certain products protected by Patent B, a possible im airment of Patent B's value may have occurred at Decem ber 31, 2022. The controller for Tahir estimates the future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2023 $2,500 2024 2,500 2025 2,500 The discount rate to be used for these cash flows proper is 8%. (Assume that the cash flows occur at the end of the year.) (Annuity Factor @ 8% for 3 yrs = $2.57710) Instructions (a). Compute the total carrying amount of Tahir's patents on its December 31, 2021, balance sheet. (b). Compute the total carrying amount of Tahir's patents on its December 31, 2022, balance sheet.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

Tones Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 3/1/16 17 years Patent B $15,000 7/1/17 10 years Patent C $14,400 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $245,700 were incurred during the year. 2. Patent D was purchased on July 1 for $36,480. This patent has a useful life of 9½ years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2020. The controller for Tones estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2023 2,000 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)…
Skysong Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $44,268 3/1/16 17 years Patent B $17,040 7/1/17 10 years Patent C $22,560 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $247,000 were incurred during the year. 2. Patent D was purchased on July 1 for $37,848. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2020. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,200 2022 2,200 2023 2,200 The proper discount rate to be used for these flows is 8%. (Assume that the…
Sage Hill Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $43,860 3/1/16 17 years Patent B $16,800 7/1/17 10 years Patent C $21,600 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $245,000 were incurred during the year. 2. Patent D was purchased on July 1 for $40,470. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2020. The controller for Sage Hill estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,100 2022 2,100 2023 2,100 The proper discount rate to be used for these flows is 8%. (Assume…
Sage Hill Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $41,616 3/1/16 17 years Patent B $15,480 7/1/17 10 years Patent C $16,320 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $234,000 were incurred during the year. 2. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B’s value may have occurred at December 31, 2020. The controller for Sage Hill estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2023 2,000 The proper discount rate to be used for these flows is 8%. (Assume…
Drexler incurred P234,000 of experimental and development costs in its laboratory to develop a patentwhich was granted on January 2, 20x4. Legal fees and other costs associated with registration of thepatent totaled P49,200. Management estimates that the useful life of the patent will be eight (8) years. 7. What is the carrying amount of the patent on December 31, 20x4?
On January 1, 2011, the account balances of Miami Company showed patent cost of P1,920,000 and related accumulated amortization of P240,000. The patent was purchased on January 1, 2009 at which date the remaining legal life was 16 years. On January 1, 2011, the useful life of the patent was determined to be 8 years from the date of acquisition.On January 1, 2011, Miami paid P800,000, of which three-fourths was for a trademark and one-fourth was for the other entity’s agreement not to compete for a 5-year period in the line of business covered by the trademark. Miami considers the life of the trademark indefinite. Moreover, Miami agreed to pay P50,000 to the other entity as consulting fee each year for 5 years payable every January 1. Question: What is the amortization of intangible assets for 2011?
During 2022, Brownie Company incurred research and development cost of P272,000 relating to the patent that was granted on July 1, 2022. Cost of registering the patent is P68,000. The patent legal life is 20 years. However, the management expected that the patent will be useful for 10 years only. On December 31, 2022, what amount should be reported as patent, net of accumulated amortization?
At December 31, 2020, Green company had three existing patents shown below: Date Acquired Cost Useful life Patent A February 14, 2016 P 150,000 8 years Patent B January 3, 2019 210,250 10 years Patent C July 1, 2019 72,000 5 years During 2021, the company had the following transactions and assessments: Due to the emerging competition relating to the product being manufactured in Patent A, it is expected that the right will be useful only in 2021 and 2022. Patent B is believe to be uniquely useful as long as the company retains the right to use it. On June 1, 2021, the company unsuccessfully attempted to defend its right to Patent C. Legal fees of P15,000 was incurred in this action. The asset was immediately derecognized in the accounts. The company’s policy is to take full year amortization in the year of acquisition and no amortization in the year of derecognition using straight-line method. How…
Mark Inc. incurred P816,000 of research and development costs in its laboratory to develop a patent which was granted on January 2, 2022. Additional costs of P152,000 were incurred in 'the registration of the patent. The estimated economic life of the patent a eight years.What amount should Mark charge to patent amortization expense for the year ended December 31, 2022? The answer must be 19,000
Oriole Company incurred $930000 of research and development costs in its laboratory to develop a new product. It spent $174000 in legal fees for a patent granted on January 2, 2022. On July 31, 2022, Oriole paid $82000 for legal fees in a successful defense of the patent. What is the total amount that should be debited to Patents through July 31, 2022?
During 2018, Matsumura Ltd. spent ¥170,000 in research costs. As a result, a new productcalled the New Age Piano was patented. The patent was obtained on October 1, 2018, and hada legal life of 20 years and a useful life of 10 years. Legal costs of ¥24,000 related to the patentwere incurred as of October 1, 2018. (Amounts are in thousands.)Required:1. Prepare all journal entries required in 2018 and 2019 as a result of the transactionsabove.2. On June 1, 2020, Matsumura spent ¥12,400 to successfully prosecute a patentinfringement suit. As a result, the estimate of useful life was extended to 12 years from June 1,2020. Prepare all journal entries required in 2020 and 2021.3. In 2022, Matsumura determined that a competitor's product would make the New AgePiano obsolete and the patent worthless by December 31, 2023. Prepare all journal entriesrequired in 2022 and 2023.
EE provided the following information regarding its Research JPB-04 included in the company’s Intangible account as of December 31, 2022: Research JPB-04 is for a research project which consists of the following charges: Salaries of research staff, P18,000 Patent acquired solely for the use in the project, P12,000 Special equipment acquired and useful for various similar research activities, P10,000 Patent acquired for use in several research projects including JPB-04, P16,000 The equipment and patents have been found to be useful for approximately four years. Both the patents and equipment were acquired at the beginning of 2022. How much should be recognized as research and development expense for the year 2022?