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: Itis the process of allocating the value of the intangible assets over its definite estimated useful life.
To determine: the patent amortization expense for the Year 4 ended December 31.
B.
To Journalize: the
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Chapter 9 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
- Kleen 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_forwardKleen 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 answer to the nearest dollar. a. Determine the patent amortization expense for the Year 4 ended December 31. b.) Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization.arrow_forwardAccounting A company purchased a patent for $50,000 with a remaining legal life of 10 years. Calculate the annual amortization expense using the straight-line method and the book value of the patent after 5 years.arrow_forward
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- A. Manam Co purchased a Trademark for $ 160,000 on October 1, 2020. The Trademark is legally used for 10-year period. Required: Prepare the journal entry to record the amortization expense on Dec 31, 2020arrow_forwardBlue Co. purchased a patent from the inventor for $36,000 on March 1, 20X6. Blue Co.’s fiscal year-end is December 31 each year. On the March 1, 20X6 purchase date, the remaining legal life of the patent was 6 years based on the original legal life of 20 years less 14 years since the patent was registered. Also on the March 1, 20X6 purchase date, the estimated remaining useful life of the patent for Blue Co.’s purposes is 3 years. Blue Co. amortizes patent costs in the year of acquisition for the portion of the year the patent was held. What is the patent’s book or carrying value as of December 31, 20X7? a. $14,000 b. $12,000 c. $22,000 d. $10,000arrow_forwardPrepare journal entries for acquisition of patent, amortization of patent on December 31 and entries for impaired goodwill as on December 31 for the patent which was acquired with the amount of P1,500,000 by Roby Co on April 1 with life of 12 yrs. The company has estimated that the goodwill amounted to P600,000 was inpaired as on December 31. EXE.2.2arrow_forward
- On January 2, 1998, the Jackson Corporation acquired patent rights from the Cooper Company for $85,000, incurring legal costs of $5,000. Although the patent will not expire for 17 years, its estimated useful is only 15 years. Journalize the entry to amortize the patent at the end of the current fiscal year.arrow_forwardKleen Company acquired patent rights on January 10 of Year 1 for $400,000. 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 $20,000. Question Content Area a. Determine the patent amortization expense for the Year 4 ended December 31.fill in the blank 1 of 1$ Feedback Area Feedback 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 Account Debit Credit blankarrow_forward16. Logan Corporation purchased a patent for $60,000 on 1-1-2023. The patent has a 5 year remaining life. Required: Record the first year's amortization in the journal.arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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