Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
26th Edition
ISBN: 9781337498159
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 10, Problem 10.20EX
a)
To determine
Patent:
Patent is a right that is exclusively granted by the Government to an individual or firm to process or design, to make, use or sell its invention for a limited period. It protects the right of the inventor from doing so by any other individual till the granted period expires.
Amortization:
It is the process of allocating the value of the intangible assets over its definite estimated useful life.
the patent amortization expense for the year ended December 31, 2016.
b)
To determine
To Journalize: the
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Kleen Company acquired patent rights on January 10 of Year 1 for $881,100. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $49,200.
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CHART OF ACCOUNTS
Kleen Company
General Ledger
ASSETS
110
Cash
111
Petty Cash
112
Accounts Receivable
114
Interest Receivable
115
Notes Receivable
116
Merchandise Inventory
117
Supplies
119
Prepaid Insurance
120
Land
123
Delivery Truck
124
Accumulated Depreciation-Delivery Truck
125
Equipment
126
Accumulated Depreciation-Equipment
130
Mineral Rights
131
Accumulated Depletion
132
Goodwill
133
Patents
LIABILITIES
210
Accounts Payable
211
Salaries Payable
213
Sales Tax Payable…
41
Reported in the ledger of Mayumi Company On December 31, 2017, is a Patent account with a balance of P120,000, and accumulated amortization of P 60,000. The Patent is being amortized for its useful life of eight years. On July 1, 2018, Mayumi spent P 30,000 to defend the patent against an infringement suit. On January 1, 2019, with the rapid change in technology, the company determined that the patent will be of no value to the company and that a loss on patent obsolescence has to be recognized.How much is the loss on patent obsolescence?
Chapter 10 Solutions
Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
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