Need help with this question solution general accounting During 2005, Reynosa Inc.'s research and development departmentdeveloped a new manufacturing process. Research and developmentcosts were $85,000. The process was patented on October 1, 2005. Legalcosts to acquire the patent were $11,900. Reynosa decided to expensethe patent over a 20-year time period. Reynosa's fiscal year ends onSeptember 30.On October 1, 2010, Reynosa's competition announced that it hadobtained a patent on a new process that would make Reynosa's patentcompletely worthless.1. How much amortization expense should Reynosa report in each yearthrough the year ended September 30, 2010?2. What amount of loss should Reynosa report in the year endedSeptember 30, 2011?

1. Amortization Expense Through September 30, 2010:Given Data:Cost of Patent: $11,900 (only legal…

Answered: During 2005, Reynosa Inc.'s research…

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 7MC

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On January 3, 2012, the July Company spent P196,000 to apply for and obtain a patent on a newly developed product. The patent had an estimated useful life of 10 years. At the beginning of 2014, the company spent P28,000 in successfully prosecuting an attempted infringement of the patent.. At the beginning of 2017, the company purchased for P60,000 a patent that was expected to prolong the life of its original patent by 5 years. On July 1, 2020, a competitor obtained rights to a patent that made the company's patent obsolete. REQUIRED: Prepare journal entries to record the transactions relative to the patents from January 3, 2012 to July 1, 2020, inclusive.
A patent was acquired by Renfro Corporation on January 1, 2014, at a cost of $90,000. The useful life of the patent was estimated to be 10 years. At the beginning of 2017, Renfro spent $15,000 in successfully defending an infringement of the patent. At the beginning of 2018, Renfro purchased a patent for $22,000 that was expected to prolong the life of its original patent for 5 additional years. Instructions Calculate the following amounts for Renfro Corporation. (а) Amortization expense for 2014. The balance in the Patent account at the beginning of (b) 2017, immediately after the infringement suit. Amortization expense for 2017. (c) The balance in the Patent account at the beginning of (d) 2018, after purchase of the additional patent. Amortization expense for 2018. (e)
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The Lane Company incurred the following expenditures in January 2016: (1) research and development costs of $510,000 that resulted in a new product that was patented during the year, (2) $12,000 in legal fees to have the patent registered, (3) $100,000 in advertising costs to develop a trademark for the newly patented product, (4) Legal fees of $8,000 incurred with the registration of the trademark, which will only be used for five years, and (5) $25,000 of advertising costs to promote its good name. Benefits to be derived from the patent are expected to last for five years. The president believes the promotion of Lane's good name will benefit the firm for three years. How much amortization expense should Lane recognize for 2016?
On January 4, 2015, a research project undertaken by Nasja Ltd. was completed and a patent was approved. The research phase of the project incurred costs of $150,000, and legal costs incurred to obtain the patent approval were $20,000. The patent is assessed to have a useful life to 2025, or for ten years. Early in 2016, Nasja successfully defended the patent against a competitor, incurring a legal cost of $22,000. This set a precedent for Nasja who was able to reassess the patent’s useful life to 2030. During 2017, Nasja was able to create a product design that was feasible for commercialization, but no more certainty was known at that time. Costs to get the product design to this stage were $250,000. Additional engineering and consulting fees of $50,000 were incurred to advance the design to the manufacturing stage. Nasja follows IFRS. Required: a. Prepare all the relevant journal entries for the project for 2015 to 2017, inclusive. b. What is the accounting treatment for the…
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Bluestone Company had three intangible assets at the end of the current year: A patent purchased this year from Miller Co. on January 1 for a cash cost of $5,600. When purchased, the patent had an estimated life of 8 years. A trademark was registered with the federal government for $12,500. Management estimated that the trademark could be worth as much as $290,000 because it has an indefinite life. Computer licensing rights were purchased this year on January 1 for $48,000. The rights are expected to have a four-year useful life to the company. Required: Compute the acquisition cost of each intangible asset. Compute the amortization of each intangible for the current year ended December 31. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
The following costs were incurred by Mark Corporation during 2020: Legal fees paid to attorneys in connection with a patent application related to a new invention developed by the company's laboratory personnel: $40,000. Salaries of personnel involved in searching for applications of new research findings: $150,000. Cost of machinery acquired on January 1, 2020: $355,000. The machinery will be used in a current research and development project, as well as several other R&D projects over the next eight years, after which the machine is expected to be sold for $15,000. Mark Corporation uses straight-line depreciation. Costs of design, construction, and testing of preproduction prototypes of potential new product lines for the company: $70,000. Cost of developing a valuable new product that was successfully patented: $100,000. Cost of marketing research to promote the new product: $60,000. Required:Calculate the total research and development expense that should appear in Mark's…
Orlando Packaging Company purchased a patent on a box-folding machine for $160,000 on July 1, 2012. The useful life was estimated at 20 years. There were 19 years remaining on the patent when it was purchased. In 2019, the CEO of Orlando Packaging noted a decrease, industry-wide, in the demand for folded boxes. As a result, an impairment analysis was done as of June 30, 2019. The CEO estimated that the patent had a remaining useful life of 5 years. Expected annual cash flows over the next 5 years were estimated at $20,000. The discount rate used by Orlando Packaging is 5%. The present value of the cash flows is $14,463 1. Was the Orlando Packaging Company patent impaired at June 30, 2019? If so, what was the amount of the impairment loss? O A) No; $0 O B) Yes; $14,463 C) Yes; $17,410 O D) Yes; $4,000

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