5.  Paris paid Cherry $333,333 on 12/31/2020 for the exclusive right to market a particular product using the Cherry Co name and logo in promotional material. The franchise follows the rules of Going Concern. Paris also spent $600,000 on 12/31/2020 in developing a new manufacturing process. Its application for a patent is submitted. Paris believes it will be successful In January of 2021 Paris application for a patent was granted.  Legal and registrations costs incurred were $ 210,000.  The patent runs for 20 years.  But the manufacturing process will only be useful to Paris for 10 years Paris incurred $160,000 on 12/31/2020 in successfully defending one of its patents in an infringement suit.  The patent expires during December 2024 On 12/31/2021 Paris also incurred $480,000 in an unsuccessful patent defense.  As a result of the adverse verdict the patent with a remaining unamortized cost of $252,000 is deemed worthless What is the impact on net income after all proper adjustments are made?

Question

5.  Paris paid Cherry $333,333 on 12/31/2020 for the exclusive right to market a particular product using the Cherry Co name and logo in promotional material. The franchise follows the rules of Going Concern.

Paris also spent $600,000 on 12/31/2020 in developing a new manufacturing process. Its application for a patent is submitted. Paris believes it will be successful

In January of 2021 Paris application for a patent was granted.  Legal and registrations costs incurred were $ 210,000.  The patent runs for 20 years.  But the manufacturing process will only be useful to Paris for 10 years

Paris incurred $160,000 on 12/31/2020 in successfully defending one of its patents in an infringement suit.  The patent expires during December 2024

On 12/31/2021 Paris also incurred $480,000 in an unsuccessful patent defense.  As a result of the adverse verdict the patent with a remaining unamortized cost of $252,000 is deemed worthless

What is the impact on net income after all proper adjustments are made?

 

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