Cheyenne Industries has the following patents on its December 31, 2024, balance sheet. Date Acquired Useful Life at Date Acquired 3/1/21 17 years 7/1/22 10 years 9/1/23 4 years Patent Item Patent A Patent B Patent C The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $247,000 were incurred during the year. Patent D was purchased on July 1 for $37,848. 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 Cheyenne estimates the expected future cash flows from Patent B will be as follows. 2. 3. Year 2026 Initial Cost $44,268 $17,040 $22,560 2027 2028 (a) Expected Future Cash Flows $2,200 2,200 2,200 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. Your Answer Correct Answer (Used) Compute the total carrying amount of Cheyenne's patents on its December 31, 2024, balance sheet. (Round answer to O decimal places,e.g. 5,125.) Total carrying amount $ 62,106

Cheyenne Industries has the following patents on its December 31, 2024, balance sheet. Date Acquired Useful Life at Date Acquired 3/1/21 17 years 7/1/22 10 years 9/1/23 4 years Patent Item Patent A Patent B Patent C The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $247,000 were incurred during the year. Patent D was purchased on July 1 for $37,848. 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 Cheyenne estimates the expected future cash flows from Patent B will be as follows. 2. 3. Year 2026 Initial Cost $44,268 $17,040 $22,560 2027 2028 (a) Expected Future Cash Flows $2,200 2,200 2,200 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. Your Answer Correct Answer (Used) Compute the total carrying amount of Cheyenne's patents on its December 31, 2024, balance sheet. (Round answer to O decimal places,e.g. 5,125.) Total carrying amount $ 62,106

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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