Sheridan Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C 1 2 Initial Cost 3. $41,820 $15,600 $16,800 Date Acquired 3/1/21 The following events occurred during the year ended December 31, 2025. Research and development costs of $235,000 were incurred during the year. Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 year As a result of reduced demands for certain products protected by Patent B 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years 4 years
Sheridan Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C 1 2 Initial Cost 3. $41,820 $15,600 $16,800 Date Acquired 3/1/21 The following events occurred during the year ended December 31, 2025. Research and development costs of $235,000 were incurred during the year. Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 year As a result of reduced demands for certain products protected by Patent B 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years 4 years
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 8P
Related questions
Question
![Sheridan Industries has the following patents on its December 31, 2024, balance sheet.
(b)
Patent Item
Year
Patent A
2
2026
Patent B
2027
(a)
Patent C
The following events occurred during the year ended December 31, 2025.
1 Research and development costs of $235,000 were incurred during the year.
Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 years.
As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may
have occurred at December 31, 2025. The controller for Sheridan estimates the expected future cash flows from Patent B
will be as follows.
3.
Show Transcribed Text
2028
Initial Cost
$41,820
$15,600
$16,800
Expected Future
Cash Flows
$2,050
2,050
2,050
✓ Your answer is correct.
Total carrying amount
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)
Click here to view factor tables.
Total carrying amount $
Show Transcribed Text
Date Acquired
3/1/21
7/1/22
9/1/23
x Your answer is incorrect.
Compute the total carrying amount of Sheridan's patents on its December 31, 2024, balance sheet. (Round answer to O decimal
places eg 5,125)
Useful Life at Date Acquired
17 years
10 years
4 years
S
55290
3
109264,6
Ć
3
Compute the total carrying amount of Sheridan's patents on its December 31, 2025, balance sheet. (Round present value factor
calculations to 5 decimal places, eg. 1.25124 and final answer to 0 decimal places eg. 58,971.)
C](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0eebf921-a432-4486-9d9c-73dbc11029dd%2F20851fdc-ee61-4f8b-b390-ece87b25e192%2F7tlpr9o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sheridan Industries has the following patents on its December 31, 2024, balance sheet.
(b)
Patent Item
Year
Patent A
2
2026
Patent B
2027
(a)
Patent C
The following events occurred during the year ended December 31, 2025.
1 Research and development costs of $235,000 were incurred during the year.
Patent D was purchased on July 1 for $45,372. This patent has a useful life of 91/2 years.
As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may
have occurred at December 31, 2025. The controller for Sheridan estimates the expected future cash flows from Patent B
will be as follows.
3.
Show Transcribed Text
2028
Initial Cost
$41,820
$15,600
$16,800
Expected Future
Cash Flows
$2,050
2,050
2,050
✓ Your answer is correct.
Total carrying amount
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year)
Click here to view factor tables.
Total carrying amount $
Show Transcribed Text
Date Acquired
3/1/21
7/1/22
9/1/23
x Your answer is incorrect.
Compute the total carrying amount of Sheridan's patents on its December 31, 2024, balance sheet. (Round answer to O decimal
places eg 5,125)
Useful Life at Date Acquired
17 years
10 years
4 years
S
55290
3
109264,6
Ć
3
Compute the total carrying amount of Sheridan's patents on its December 31, 2025, balance sheet. (Round present value factor
calculations to 5 decimal places, eg. 1.25124 and final answer to 0 decimal places eg. 58,971.)
C
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