a.
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 2016 ended December 31.
b.
To Journalize: the
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- Recording Amortization Dovetail Technologies Company acquired patent rights on January 6, 20Y5, for $2,265,000. The patent has a useful life of 14 years. On January 7, 20Y6, Dovetail Technologies successfully defended the patent in a lawsuit at a cost of $283,125. a. Determine the patent amortization expense for the current year ended December 31, 20Y6, If required, round your answer to nearest whole value. b. Illustrate the effects on the accounts and financial statements to recognize the amortization. For decreases in accounts or outflows of cash, enter your answers as negative numbers. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Round your final answer to the nearest whole dollar. Financial Statement Effects. Dec. 31. Assets) Statement of Cash Flows Balance Sheet " Liabilities + Stockholders' Equity Income Statementarrow_forwardAmortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $352,000. 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 $17,500. If required, round your answers to the nearest dollar. a. Determine the patent amortization expense for Year 4 ended December 31.arrow_forwardAmortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $472,000. 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 $23,500. If required, round your answers to the nearest dollar. a. Determine the patent amortization expense for Year 4 ended December 31. $236,000 X b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. Amortization Expense-Patents Patents 29,500 X 29,500 Xarrow_forward
- Amortization Entries Kleen Company acquired patent rights on January 10 of Year 1 for $360,000. 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 $18,000. If required, round your answers to the nearest dollar. Question Content Area a. Determine the patent amortization expense for Year 4 ended December 31.$fill in the blank bc4756fc8040fa8_1 Question Content Area b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select -arrow_forwardKleen 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. Required: a. Determine the patent amortization expense for Year 4 ended December 31. b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. Refer to the Chart of Accounts for exact wording of account titlesarrow_forward41 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?arrow_forward
- View Policies Current Attempt in Progress Monty Engineering purchases a patent for R$139,200 on January 2, 2025. Its estimated useful life is 8 years. (a) Prepare the journal entry to record amortization expense for the first year. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit (b) Show how this patent is reported on the statement of financial position at the end of the first year. MONTY ENGINEERING Statement of Financial Position (Partial) R$ Creditarrow_forwardeBook Amortization entries < Show Me How Kleen Company acquired patent rights on January 10 of Year 1 for $416,000. The patent has a useful life equal to its legal life of 8 years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $21,000. A Determine the patent amortization expense for Year 4 ended December 31. Print Item b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. 00arrow_forwardA On July 1, 2020 ABC Co. purchaseda patent for $2,400,000. The patent legally protects the owner for 20 years and the company plans to use it for 30 years. Beguired: Prepare the journal entry to record the amortization expense on Dec. 31, 2020 B. On January 1, 2017, Sar Co. purchased oquipment costing $312,000. The equipment has been depreciated using the straight-line method based on estimated salvage value of $24,000 and an entimated usieful lhfe of 6 years. On Aprıl 1, 2020, the company sold the equipment for $ 140,000 cash. Required Prepare journal entries to record: 1. The partial year's depreciation (the update) on April 1, 2020. 2 The sale of the equipment on April 1, 2020. YOUR ANSWER SHOULD BE IN THE FOLLOWING FORM; DO NOT USE"" BETWEEN NUMBERS: Dr. Cash 10000 C Land 10000 For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). I. ... B. Paragraph Arial 14pxarrow_forward
- VICHIURGICS Current Attempt in Progress Bridgeport Ltd. shows a patent on its statement of financial position. At its year end of October 31, 2022, the caption read Patent (net) $73,500 and at its year end of October 31, 2023, the caption read Patent (net) $47,000. Bridgeport's recorded amortization on the patent in the amount of $5,100 for the 2023 fiscal year and the remaining change in the account resulted from recording a loss on impairment for the year ended October 31, 2023. There were no purchases or sales of patents during the year. Determine the necessary caption(s) and amount(s) that should appear on Bridgeport's statement of cash flows, using the indirect method. Indicate where the item(s) would appear on the statement (the operating, investing, or financing section(s)). (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) Bridgeport Ltd. Statement of Cash Flow (Partial) For the Year Ended October 31, 2023 Adjustments to…arrow_forwardOn January 1, 2015, Moose Co. purchased for $360,000 a patent that had been granted two years earlier. On January 1, 2017, legal costs of $64,000 were incurred in a successful defense of the patent. Assuming the maximum period allowable is used for patent amortization, what is Moose's patent amortization expense for 2017? $21,555 $20,000 $18,000 $24,000arrow_forwardKleen Company acquired patent rights on January 10 of Year 1 for $344,000. 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 $17,000. If required, round your answers to the nearest dollar. Question Content Area a. Determine the patent amortization expense for Year 4 ended December 31.$fill in the blank 88c643fcdfe1040_1 Feedback Area Feedback For intangible assets with finite lives, a company uses the straight-line method to calculate amortization. If a company successfully defends a patent it becomes part of the cost of the patent. If the company loses a lawsuit regarding a patent infringement, then the patent is written off. Question Content Area b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization. If an amount box does not require an entry, leave it blank. blank Amortization Expense-Patents…arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning