Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows.Date Activity Cost2011 − 2012 Research conducted to develop precipitator $384,000Jan. 3, 2013 Design and construction of a prototype (capitalization criteria not yet met) 90,900Mar. 15, 2013 Testing of models 42,200Jan. 4, 2014 Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 51,900Nov. 30, 2015 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 83,000Dec. 31, 2016 Legal fees paid to successfully defend precipitator patent 51,250Apr. 15, 2017 Research aimed at modifying the design of the patented precipitator 52,250July 31, 2021 Legal fees paid in unsuccessful patent infringement suit against a competitor 32,500Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes. Calculate the carrying value of patent No. 758-6002-1A on December 31, 2014.Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2018.Carrying value of patent $Enter your answer in accordance to the question statement Calculate the carrying value of patent No. 758-6002-1A on December 31, 2021.Carrying value of patent $Enter your answer in accordance to the question statement Would your answer differ if ASPE were followed?Choose the answer from the menu in accordance to the question statement

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Answered: Fields Laboratories holds a valuable…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufacture or sell the products and processes it develops. Instead, it conducts research and develops products and processes that it patents, and then assigns the patents to manufacturers on a royalty basis. Occasionally it sells one of its patents. The history of Fields patent number 758-6002-1A is as follows.

Date	Activity	Cost
2011 − 2012	Research conducted to develop precipitator	$384,000
Jan. 3, 2013	Design and construction of a prototype (capitalization criteria not yet met)	90,900
Mar. 15, 2013	Testing of models	42,200
Jan. 4, 2014	Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014	51,900
Nov. 30, 2015	Engineering activity necessary to advance the design of the precipitator to the manufacturing stage	83,000
Dec. 31, 2016	Legal fees paid to successfully defend precipitator patent	51,250
Apr. 15, 2017	Research aimed at modifying the design of the patented precipitator	52,250
July 31, 2021	Legal fees paid in unsuccessful patent infringement suit against a competitor	32,500

Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2019, it revised its useful life estimate downward to five remaining years. The company’s year ends December 31. Fields follows IFRS for reporting purposes.

Calculate the carrying value of patent No. 758-6002-1A on December 31, 2014.

Carrying value of patent

$Enter your answer in accordance to the question statement

Calculate the carrying value of patent No. 758-6002-1A on December 31, 2018.

Carrying value of patent

$Enter your answer in accordance to the question statement

Calculate the carrying value of patent No. 758-6002-1A on December 31, 2021.

Carrying value of patent

$Enter your answer in accordance to the question statement

Would your answer differ if ASPE were followed?

Choose the answer from the menu in accordance to the question statement

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