Concord Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Concord does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Concord patent number 758-6002-1A is as follows. Date 2016-2017 Jan. 2018. March 2018 Jan. 2019 Nov. 2020 Dec. 2021 April 2022 July 2026 Activity Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2019 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Cost $382,000 86,000 46,200 62,900 84,500 46,200 47,200 35,000 Concord assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2024, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31.
Concord Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Concord does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history of Concord patent number 758-6002-1A is as follows. Date 2016-2017 Jan. 2018. March 2018 Jan. 2019 Nov. 2020 Dec. 2021 April 2022 July 2026 Activity Research conducted to develop precipitator Design and construction of a prototype Testing of models Fees paid engineers and lawyers to prepare patent application; patent granted June 30, 2019 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage Legal fees paid to successfully defend precipitator patent Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Cost $382,000 86,000 46,200 62,900 84,500 46,200 47,200 35,000 Concord assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2024, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Compute the carrying value of patent No. 758-6002-1A on each of the following dates: a. December 31, 2019 $ b. December 31, 2023 $ c. December 31, 2026 $
Transcribed Image Text:Concord Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution.
Concord does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and
processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells a patent. The history
of Concord patent number 758-6002-1A is as follows.
Date
2016-2017
Jan. 2018
March 2018
Jan. 2019
Nov. 2020
Dec. 2021
April 2022
July 2026
Activity
Research conducted to develop precipitator
Design and construction of a prototype
Testing of models
Fees paid engineers and lawyers to prepare patent application;
patent granted June 30, 2019
Engineering activity necessary to advance the design of the
precipitator to the manufacturing stage
Legal fees paid to successfully defend precipitator patent
Research aimed at modifying the design of the patented precipitator
Legal fees paid in unsuccessful patent infringement suit against a
competitor
Cost
$382,000
86,000
46,200
62,900
84,500
46,200
47,200
35,000
Concord assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2024, it revised its useful life
estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no
amortization for the year if the cost is incurred after June 30. The company's year ends December 31.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education