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 $369,000 Jan. 3, 2013 Design and construction of a prototype (capitalization criteria not yet met) 88,200 Mar. 15, 2013 Testing of models 40,400 Jan. 4, 2014 Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 64,800 Nov. 30, 2015 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 82,500 Dec. 31, 2016 Legal fees paid to successfully defend precipitator patent 38,500 Apr. 15, 2017 Research aimed at modifying the design of the patented precipitator 39,500 July 31, 2021 Legal fees paid in unsuccessful patent infringement suit against a competitor 33,500 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

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 $369,000 Jan. 3, 2013 Design and construction of a prototype (capitalization criteria not yet met) 88,200 Mar. 15, 2013 Testing of models 40,400 Jan. 4, 2014 Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014 64,800 Nov. 30, 2015 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 82,500 Dec. 31, 2016 Legal fees paid to successfully defend precipitator patent 38,500 Apr. 15, 2017 Research aimed at modifying the design of the patented precipitator 39,500 July 31, 2021 Legal fees paid in unsuccessful patent infringement suit against a competitor 33,500 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

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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Date	Activity	Cost
2011 − 2012	Research conducted to develop precipitator	$369,000
Jan. 3, 2013	Design and construction of a prototype (capitalization criteria not yet met)	88,200
Mar. 15, 2013	Testing of models	40,400
Jan. 4, 2014	Fees paid to engineers and lawyers to prepare patent application; patent granted January 4, 2014	64,800
Nov. 30, 2015	Engineering activity necessary to advance the design of the precipitator to the manufacturing stage	82,500
Dec. 31, 2016	Legal fees paid to successfully defend precipitator patent	38,500
Apr. 15, 2017	Research aimed at modifying the design of the patented precipitator	39,500
July 31, 2021	Legal fees paid in unsuccessful patent infringement suit against a competitor	33,500

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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