(17). Tahir Industries has the following patents on its December 31, 2021, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired $ 48,000 $ 19,200 $ 16,800 Patent A 3/1/18 20 years Patent B 7/1/19 10 years Patent C 9/1/20 8 years The following events occurred during the year ended December 31, 2022. (1). Research and development costs of $347,000 were incurred during the year. (2). Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 years. (3). As a result of reduced demands fo certain products protected by Patent B, a possible im airment of Patent B's value may have occurred at Decem ber 31, 2022. The controller for Tahir estimates the future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2023 $2,500 2024 2,500 2025 2,500 The discount rate to be used for these cash flows proper is 8%. (Assume that the cash flows occur at the end of the year.) (Annuity Factor @ 8% for 3 yrs = $2.57710) Instructions (a). Compute the total carrying amount of Tahir's patents on its December 31, 2021, balance sheet. (b). Compute the total carrying amount of Tahir's patents on its December 31, 2022, balance sheet.

(17). Tahir Industries has the following patents on its December 31, 2021, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired $ 48,000 $ 19,200 $ 16,800 Patent A 3/1/18 20 years Patent B 7/1/19 10 years Patent C 9/1/20 8 years The following events occurred during the year ended December 31, 2022. (1). Research and development costs of $347,000 were incurred during the year. (2). Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 years. (3). As a result of reduced demands fo certain products protected by Patent B, a possible im airment of Patent B's value may have occurred at Decem ber 31, 2022. The controller for Tahir estimates the future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2023 $2,500 2024 2,500 2025 2,500 The discount rate to be used for these cash flows proper is 8%. (Assume that the cash flows occur at the end of the year.) (Annuity Factor @ 8% for 3 yrs = $2.57710) Instructions (a). Compute the total carrying amount of Tahir's patents on its December 31, 2021, balance sheet. (b). Compute the total carrying amount of Tahir's patents on its December 31, 2022, balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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