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compute the total carrying amount of Oriole's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971.) Total carrying amount $ 38703

compute the total carrying amount of Oriole's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971.) Total carrying amount $ 38703

FINANCIAL ACCOUNTING
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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Oriole Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C Initial Cost 2. $44,472 $17,160 $23,040 3. Date Acquired 3/1/21 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years The following events occurred during the year ended December 31, 2025. 4 years 1. Research and development costs of $248,000 were incurred during the year. Patent D was purchased on July 1 for $26,106. 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 Oriole estimates the expected future cash flows from Patent B will be as follows.
Transcribed Image Text:Oriole Industries has the following patents on its December 31, 2024, balance sheet. Patent Item Patent A Patent B Patent C Initial Cost 2. $44,472 $17,160 $23,040 3. Date Acquired 3/1/21 7/1/22 9/1/23 Useful Life at Date Acquired 17 years 10 years The following events occurred during the year ended December 31, 2025. 4 years 1. Research and development costs of $248,000 were incurred during the year. Patent D was purchased on July 1 for $26,106. 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 Oriole estimates the expected future cash flows from Patent B will be as follows.
Year 2026 2027 2028 Expected Future Cash Flows $1,800 1,800 1,800 he proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) compute the total carrying amount of Oriole's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971.) Total carrying amount $ 38703
Transcribed Image Text:Year 2026 2027 2028 Expected Future Cash Flows $1,800 1,800 1,800 he proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) compute the total carrying amount of Oriole's patents on its December 31, 2025, balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971.) Total carrying amount $ 38703
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