### Weaver Corporation Patent Purchase and Amortization**Scenario:**On January 1, 2024, Weaver Corporation purchased a patent for $264,000. The remaining legal life of the patent is 20 years, but the company estimates it will be useful for only six more years. In January 2026, the company incurred legal fees of $84,000 in successfully defending a patent infringement suit. This successful defense did not change the company's estimated useful life of the patent. Weaver Corporation's fiscal year ends on December 31. **Requirements:**1. **Record the Purchase and Amortization:** - **2024:** Record the purchase and amortization. - **2025:** Record the amortization. - **2026:** Record the legal fees and amortization.2. **Determine the Balance:** - **At the end of 2026:** Calculate the balance in the Patent account.**Steps to Complete:**- To complete the calculations, enter the data in the required fields and tabs provided in your accounting software or worksheet.1. **Required 1:** - Record the purchase made in 2024 and the related amortization expenses for 2024. - Record the amortization expenses for 2025. - For 2026, record both the legal fees and the amortization expenses.2. **Required 2:** - Calculate the balance in the Patent account at the end of 2026.**Example Calculation:**1. **Purchase and Amortization:** - 2024 Purchase = $264,000 - Amortization (Annual) = $264,000 / 6 years = $44,000 per year - 2024 Amortization: $44,000 - 2025 Amortization: $44,0002. **Legal Fees and Amortization in 2026:** - Legal Fees = $84,000 (added to the Patent account) - New Patent Value = $264,000 + $84,000 = $348,000 - Remaining useful life as of 2026 = 6 - 2 (years 2024 and 2025) = 4 years - New Amortization (Annual) = $348,000 / 4 years = $87,000 - 2026 Amortization

Amortization expenses to be charged on Intangible assets over it's useful life of an asset. This is…

2024, Weaver Corporation purchased a patent for $264,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2026, the company incurred legal fees of $84,000 in successfully defending a patent infringement suit. The successful defense did not change the company's estimate of useful life. Weaver Corporation's year-end is December 31. Required: 1. Record the

2024, Weaver Corporation purchased a patent for $264,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2026, the company incurred legal fees of $84,000 in successfully defending a patent infringement suit. The successful defense did not change the company's estimate of useful life. Weaver Corporation's year-end is December 31. Required: 1. Record the

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6EA: Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of...

See similar textbooks

Similar questions

Sandhill Inc. purchased a patent on January 1, 2023 for $500000. Sandhill did not record amortization expense on the patent for 2023 and 2024. At the purchase date, the expected useful life of the patent was 10 years. At December 31, 2025, what should be recorded as the amortization expense? $0 because the value of the patent has not decreased $100000 O $50000 O $150000
R Company registered a patent on January 1, 2015. P Company purchased the patent from R Company for $450,000 on January 1, 2020, and began to amortize the patent over its remaining legal life. In early 2021, P Company determined that the patent's economic benefits would last only until the end of 2025. What amount should P Company record for patent amortization in 2021? $30,000 $70,000 $90,000 $84,000
15. Mysore Company acquired a patent on January 1, 2022, for $75,000. The patent has a remaining legal life of 15 years, but Mysore expects to receive benefits from the patent for only five years. What amount of amortization expense does Mysore record in 2022 related to the patent? a.$5,000 b.$7,500 c.$15,000 d.$0—patents are not amortized
On December 31, 2020, Zari Company acquired the following intangible assets:• A trademark for P3,000,000. The trademark has 8 years remaining in its legal life. It is anticipated that the trademark will be renewed in the future, indefinitely, without problem. ,• A patent for P2,000,000. Because of market conditions, it is expected that the patent will have economic life for just 5 years, although the remaining legal life is 10 years.Because of a decline in the economy, the trademark is now expected to generate cash flows of just P120,000 per year. The useful life of the trademark still extends beyond the foreseeable horizon. The cash flows expected to be generated by the patent are P500,000 in 2022, P600,000 in 2023, P400,000 in 2024 and P500,000 in 2025. The appropriate discount rate for all intangible assets is 6%. The present value of 1 at 6% for one period is 0.94, for two periods is 0.89, for three periods is…
1. Pharoah purchased a patent from Vania Co. for $2,700,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Pharoah determined that the economic benefits of the patent would not last longer than 7 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported 2$ 2. Pharoah bought a franchise from Alexander Co. on January 1, 2019, for $979,000. The carrying amount of the franchise on Alexander's books on January 1, 2019, was $635,000. The franchise agreement had an estimated useful life of 20 years. Because Pharoah must enter a competitive bidding at the end of 2028, it is unlikely that the franchise will be retained beyond 2028. What amount should be amortized for the year ended December 31, 2020? The amount to be amortized 3. On January 1, 2020, Pharoah incurred organization…
ABC Co. purchased a patent on January 1, 2018 for P300,000. The patent was being amortized over its remaining legal life of 15 years. During 2020, ABC Co. determined that the economic benefits of the patent would not last longer than 10 years from the date of acquisition. What amount should be charged to patent amortization expense for the year ended December 31 2020?a. 32,500b. 26,000c. 20,000 d. 17,333 e. answer not given
On March 1, 2020, Tebow Company purchased a patent for $158,000 cash. Although the patent gives legal protection for 19 years, the patent will be used for only 2 years. Assume straight-line amortization. Amortization per unit (Cost Res. Value)/Time = Amortization per year Amortization per year X portion of year = Amortization Journalize a) the purchase of the patent, and b) the amortization expense of the patent as of December 31, 2020. Date a b Check All Parts Description Debit Credit
Required information [The following information applies to the questions displayed below] Bethany incurred $20,900 in research and experimental costs for developing a specialized product during July 2023. Bethany went through a lot of trouble and spent $10,450 in legal fees to receive a patent for the product in August 2025. Bethany expects the patent to have a remaining useful life of 10 years. Note: Do not round intermediate c calculations. b. How much patent amortization expense would Bethany deduct in 2025? Deductible patent amortization expense
A company acquired patent right on July 1, 2018 for P2,000,000. The asset has a legal life of 15 years but due to the rapidly changing technology management estimates a useful life of only 5 years. On January 1, 2019, management is uncertain that the process can actually be made economically feasible, and decides to write down the patent to an estimated market value of P600,000. Amortization will be taken three years from this time. On January 1, 2020, after having perfected the related production process, the asset is now appraised at a sound value of P2,400,000. Furthermore, the estimated useful life is now believed to have extended by six more years. The company uses the straight-line method of amortization. Instructions: Compute for the following: Amortization expense for 2018. Impairment loss to be recognized in 2019 Patent carrying value at December 31, 2019 Revaluation surplus recognized in 2020.
Mm.1. Bethany incurred $60,000 in research and experimental costs for developing a specialized product during July 2022. Bethany went through a lot of trouble and spent $30,000 in legal fees to receive a patent for the product in August 2024. Bethany expects the patent to have a remaining useful life of 10 years. Note: Do not round intermediate calculations. b. How much patent amortization expense would Bethany deduct in 2024? c. If Bethany chose to capitalize but not amortize the research and experimental expenses she incurred in 2022, how much patent amortization expense would Bethany deduct in 2024?
On January 1, 2021, Weaver Corporation purchased a patent for $237,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2023, the company incurred legal fees of $57,000 in successfully defending a patent infringement suit. The successful defense did not change the company’s estimate of useful life. Weaver Corporation’s year-end is December 31. Required: 1. Record the purchase in 2021; amortization in 2021; amortization in 2022; legal fees in 2023; and amortization in 2023. 2. What is the balance in the Patent account at the end of 2023?
On January 1, 2024, Weaver Corporation purchased a patent for $243,000. The remaining legal life is 20 years, but the company estimates the patent will be useful for only six more years. In January 2026, the company incurred legal fees of $63,000 in successfully defending a patent infringement sult. The successful defense did not change the company's estimate of useful life. Weaver Corporation's year-end is December 31. Required: 1. Record the purchase in 2024; amortization in 2024; amortization in 2025; legal fees in 2026; and amortization in 2026. 2. What is the balance in the Patent account at the end of 2026? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Record the purchase in 2024; amortization in 2024; amortization in 2025; legal fees in 2026; and amortization in 2026. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)