Constrictor developed a new machine for manufacturing baseballs. Because the machine is considered very valuable, the company had it patented. The following expenditures were incurred in developing and patenting the machine. Purchases of special equipment to be used solely for development of the new machine 1,820,000 Research salaries and fringe benefits for engineers and scientists 171,000 Cost of testing prototypes 236,000 Legal costs for filing for patent 127,000 Fees paid to government patent office 25,000 Drawings required by patent office to be field with patent application 47,000 Constrictor elected to amortize the patent over its legal life. At the beginning of the second year, Constrictor Enterprises paid P240,000 to successfully defend the patent in an infringement suit. At the beginning of the fourth year, Constrictor determined that the remaining estimated useful life of the patent was five years. The carrying amount of the patent at the end of fourth year is A . 135,320 B. 131,100 C. 1,649,680 D. 39,800
) Constrictor developed a new machine for manufacturing baseballs. Because the machine is considered very
valuable, the company had it patented. The following expenditures were incurred in developing and
patenting the machine.
Purchases of special equipment to be used solely for development of the new
machine
1,820,000
Research salaries and
Cost of testing prototypes 236,000
Legal costs for filing for patent 127,000
Fees paid to government patent office 25,000
Drawings required by patent office to be field with patent application 47,000
Constrictor elected to amortize the patent over its legal life. At the beginning of the second year,
Constrictor Enterprises paid P240,000 to successfully defend the patent in an infringement suit. At the
beginning of the fourth year, Constrictor determined that the remaining estimated useful life of the patent
was five years. The carrying amount of the patent at the end of fourth year is
A
.
135,320 B. 131,100 C. 1,649,680 D. 39,800
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