# For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only$12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life. FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 #### Solutions Chapter Section FindFindarrow_forward ### Principles of Accounting Volume 1 19th Edition OpenStax Publisher: OpenStax College ISBN: 9781947172685 Chapter 11, Problem 10PB Textbook Problem 1 views ## For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense:A. A patent with a seventeen-year remaining legal life was purchased for$850,000. The patent will be usable for another six years.B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is$150,000. The company expects to be able to use this patent for all twenty years of its life.

To determine

(a)

Introduction:

The assets that do not have any physical appearance and cannot be seen or touched are known as intangible assets. However, future benefits are expected to arise from the use of such assets in the same manner as it is expected in case of tangible assets.

To calculate:

The annual amortization expense on a patent. Also, journalize the same.

### Explanation of Solution

Calculation of the amortized amount for the patents:

AmortizedAmount=PurchaseCostofthePatentEstimatedUsefulLife

Substitute $850,000 for the purchase cost of the patent and 6 years for the estimated useful life in the above formula. AmortizedAmount=$850,0006

To determine

(b)

To calculate:

The annual amortization expense on the patent of new tablet. Also, journalize the same.

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