Compute the total carrying amount of Metlock's patents on its December 31, 2025 balance sheet. (2024 carrying amount is $56,994.) Please don't give image format
Compute the total carrying amount of Metlock's patents on its December 31, 2025 balance sheet. (2024 carrying amount is $56,994.) Please don't give image format
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Compute the total carrying amount of Metlock's patents on its December 31, 2025 balance sheet . (2024 carrying amount is $56,994.)
Please don't give image format
![Metlock Industries has the following patents on its December 31, 2024, balance sheet.
Patent Item
Patent A
Patent B
Patent C
2.
3.
Year
2026
Initial Cost Date Acquired
The following events occurred during the year ended December 31, 2025.
2027
$42,432
$15,960
$18,240
1. Research and development costs of $238,000 were incurred during the year.
Patent D was purchased on July 1 for $44,346. 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 Metlock estimates the expected future cash flows from Patent B will
be as follows.
2028
Expected Future
Cash Flows
$2,200
3/1/21
2,200
7/1/22
2,200
9/1/23
Useful Life at Date Acquired
17 years
10 years
4 years
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F91605255-8a3f-4f90-b4a0-4e9393375805%2F11de88dd-9ce4-4dcc-ba15-7a93e455e651%2F49n6zrb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Metlock Industries has the following patents on its December 31, 2024, balance sheet.
Patent Item
Patent A
Patent B
Patent C
2.
3.
Year
2026
Initial Cost Date Acquired
The following events occurred during the year ended December 31, 2025.
2027
$42,432
$15,960
$18,240
1. Research and development costs of $238,000 were incurred during the year.
Patent D was purchased on July 1 for $44,346. 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 Metlock estimates the expected future cash flows from Patent B will
be as follows.
2028
Expected Future
Cash Flows
$2,200
3/1/21
2,200
7/1/22
2,200
9/1/23
Useful Life at Date Acquired
17 years
10 years
4 years
The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.)
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