Swifty Corporation purchases a patent from Wildhorse Company on January 1, 2020, for $45,000. The patent has a remaining legal life of 16 years. Swifty feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Swifty's books is $36,000. In January, Swifty spends $38,400 successfully defending a patent suit. Swifty still feels the patent will be useful until the end of 2029. Prepare the journal entries to record the $38,400 expenditure and 2022 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Swifty Corporation purchases a patent from Wildhorse Company on January 1, 2020, for $45,000. The patent has a remaining legal life of 16 years. Swifty feels the patent will be useful for 10 years. Assume that at January 1, 2022, the carrying amount of the patent on Swifty's books is $36,000. In January, Swifty spends $38,400 successfully defending a patent suit. Swifty still feels the patent will be useful until the end of 2029. Prepare the journal entries to record the $38,400 expenditure and 2022 amortization. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 40P

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