b) ABC industry has the following patents on its December 31, 2017, Balance sheet:Patent Item Initial Cost(BDT) DateAcquired1/3/14of Useful life17 years10 years4 yearsPatent A30,000Patent BPatent C15,00014,4001/7/151/9/16The following events occurred during the year ended December 31, 2018:1) Research and Development costs of Tk. 2,45,700 were incurred during the year.2) Patent D was purchased on July 1, for Tk. 36,480. This patent has a useful life of 9.5years.3) As a result of reduced demands of certain products protected by patent B, a possibleimpairment of patent B,s value may have occurred at December 31,2018. The controllerof ABC Industry estimates the expected future cash flows from patent B will be asfollows:| Year20192020| 2021Expected Future cash flows(BDT)2,0002,0002,000The proper discount rate to be used for these cash flows is 8% (Assume the cash flows occur atthe end of the year)Requirements:Compute the total carrying amount of ABC'spatents on its December 31, 2017,balance sheet. [02]|Compute the total carrying amount of ABC'spatents on its December 31, 2018,balance sheet. [02]|

Book value means the valuable assets are stated at on the general ledger and the financial…

Answered: b) ABC industry has the following…

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

See similar textbooks

Similar questions

Skysong Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $41,616 3/1/21 17 years Patent B $15,480 7/1/22 10 years Patent C $16,320 9/1/23 4 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $234,000 were incurred during the year. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years. 2. 3. 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 Skysong estimates the expected future cash flows from Patent B will be as follows.
Skysong Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A 3/1/21 17 years $41,616 $15,480 Patent B 7/1/22 10 years Patent C $16,320 9/1/23 4 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $234,000 were incurred during the year. 2. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years. 3. 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 Skysong estimates the expected future cash flows from Patent B will be as follows.
Roocky reports the following patents on its December 31, 2017 Statement of Financial Position Useful life at Initial Cost Acquisition Date acquisition date A 1,224,000.00 March 1, 2014 17 B 450,000.00 July 1, 2015 10 432,000.00 September 1, 2016 4 The following events occurred during the yearended December 31, 2018. |1. Research and development costs of 737,100 were incurred during the year. These costs |were incurred prior to projects achieving economic viability. |2. Patent D was purchased on July 1 for 855,000. It has a remaining life of 9.5 years. 3. A possible impairment of Patent B's value may have occurred at December 31, 2018. This is December 31, 2019 60,000.00 December 31, 2020 60,000.00 December 31, 2021 60,000.00 |The appropriate discount rate to be used for these cash flows is 8% Questions: 1. What is the carrying value of Roocky's patents on December 31, 2017? 2. What amount of impairment loss should be reported by Roocky for the year ended December 31, 2018? 3. What is…
Skysong Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $44,268 3/1/16 17 years Patent B $17,040 7/1/17 10 years Patent C $22,560 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $247,000 were incurred during the year. 2. Patent D was purchased on July 1 for $37,848. This patent has a useful life of 91/2 years. 3. 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, 2020. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,200 2022 2,200 2023 2,200 The proper discount rate to be used for these flows is 8%. (Assume that the…
Skysong Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Date Acquired Useful Life at Date Acquired Initial Cost Patent A $42,024 3/1/16 17 years Patent B $15,720 7/1/17 10 years Patent C $17,280 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $236,000 were incurred during the year. 2. Patent Dwas purchased on July 1 for $47,310. This patent has a useful life of 9'/2years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value i have occurred at December 31, 2020. The controller for Skysong estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,100 2022 2,100 2023 2,100 (b) Compute the total carrying amount of Skysong' patents on its December 31, 2020, balance sheet. Total carrying amount %24
Tones Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $30,600 3/1/16 17 years Patent B $15,000 7/1/17 10 years Patent C $14,400 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $245,700 were incurred during the year. 2. Patent D was purchased on July 1 for $36,480. This patent has a useful life of 9½ years. 3. 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, 2020. The controller for Tones estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2023 2,000 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)…
Sage Hill Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $41,616 3/1/16 17 years Patent B $15,480 7/1/17 10 years Patent C $16,320 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $234,000 were incurred during the year. 2. Patent D was purchased on July 1 for $47,196. This patent has a useful life of 91/2 years. 3. 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, 2020. The controller for Sage Hill estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,000 2022 2,000 2023 2,000 The proper discount rate to be used for these flows is 8%. (Assume…
Sage Hill Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $43,860 3/1/16 17 years Patent B $16,800 7/1/17 10 years Patent C $21,600 9/1/18 4 years The following events occurred during the year ended December 31, 2020. 1. Research and development costs of $245,000 were incurred during the year. 2. Patent D was purchased on July 1 for $40,470. This patent has a useful life of 91/2 years. 3. 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, 2020. The controller for Sage Hill estimates the expected future cash flows from Patent B will be as follows. Year Expected Future Cash Flows 2021 $2,100 2022 2,100 2023 2,100 The proper discount rate to be used for these flows is 8%. (Assume…
Windsor Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Patent A Patent B Patent C 2. 3. Year — Initial Cost Date Acquired $52,800 $21,600 $16,800 The following events occurred during the year ended December 31, 2020. 2021 1. Research and development costs of $327,900 were incurred during the year. Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 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, 2020. The controller for Windsor estimates the future cash flows from Patent B will be as follows. 2022 3/1/16 Future Cash Flows 7/1/17 $2,500 $2,500 9/1/18 Useful Life at Date Acquired 20 years 10 years 8 years
(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 Patent A $ 48,000 3/1/18 20 years $ 19,200 $ 16,800 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 prop discount rate to be used for these cash flows is 8%. (Assume that the cash flows occur at the end of the year.) (Annuity Factor @ 8% for 3 yrs = $2.57710) Instructions…
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…
At December 31, 2020, Green company had three existing patents shown below: Date Acquired Cost Useful life Patent A February 14, 2016 P 150,000 8 years Patent B January 3, 2019 210,250 10 years Patent C July 1, 2019 72,000 5 years During 2021, the company had the following transactions and assessments: Due to the emerging competition relating to the product being manufactured in Patent A, it is expected that the right will be useful only in 2021 and 2022. Patent B is believe to be uniquely useful as long as the company retains the right to use it. On June 1, 2021, the company unsuccessfully attempted to defend its right to Patent C. Legal fees of P15,000 was incurred in this action. The asset was immediately derecognized in the accounts. The company’s policy is to take full year amortization in the year of acquisition and no amortization in the year of derecognition using straight-line method. How…

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS