Please give correct option for this accounting question Horizon Innovations incurred $120,000 in researchand development costs and $60,000 in legal fees toacquire a patent. The patent has a legal life of 20years and a useful life of 8 years.What amount should Horizon record as PatentAmortization Expense in the first year?a. $7,500b. $15.000c. $22,500d. $0

Step 1: Define Patent Amortization ExpensePatent amortization expense refers to the annual cost…

Answered: Horizon Innovations incurred $120,000…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6EA: Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of...

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Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.
Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
How does a company record a patent worth 100,000 if: (a) it has just purchased it for 90,000? (b) the company has internally developed it at a cost of 50,000 and paid 1,000 in legal and filing fees?
For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.
Ivanhoe Company incurred research and development costs of $ 90000 and legal fees of $ 30000 to develop a patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Ivanhoe record as Patent Amortization Expense in the first year? O $0. O $ 3000. O $ 6000. O $ 12000.
Current Attempt in Progress Cullumber Company incurred research and development costs of $89000 to develop a patent, and legal fees of $29000 to register the patent. The patent has a legal life of 20 years and a useful life of 10 years. What amount should Cullumber record as Patent Amortization Expense in the first year if the straight-line method is used? O $5900 O $2900 O $11800 O $0
CP, Inc.. purchases a patent on January 1, 20X1, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming CP. uses the straight-line method, what is the carrying value of the patent on December 31, 20X2?
ABC Co. purchased a patent on January 1, 2018 for P300,000. The patent was being amortized over its remaining legal life of 15 years. During 2020, ABC Co. determined that the economic benefits of the patent would not last longer than 10 years from the date of acquisition. What amount should be charged to patent amortization expense for the year ended December 31 2020?a. 32,500b. 26,000c. 20,000 d. 17,333 e. answer not given
5. On January1, Red Manufacturing paid $52,000 for a patent. Although it gives legal protection for 20 years, the patent is expected to proide a competitive advantage fo only eight yeaES. Assuming the straight line method of amortization, record the journal entry for amortization for Year1." S ree TO
In 20x1, G Co. started to develop a patent. Total costs incurred during the year amounting to P400,000. On January 1, 20x2, the patent was fully developed. Legal and registration cost incurred in registering the patent amounted to P300,000. It was estimated that the patent has a useful life of 25 years.In 20x4, G Co. started to develop a new improved patent to extend the life of the old patent. Development costs totaled P800,000. How much is the carrying amount of the patent on December 31, 20x4? Your answer In 20x1, G Co. started to develop a patent. Total costs incurred during the year amounting to P400,000. On January 1, 20x2, the patent was fully developed. Legal and registration cost incurred in registering the patent amounted to P300,000. It was estimated that the patent has a useful life of 25 years. How much is the carrying amount of the patent on December 31, 20x2? Your answer
Calico Inc. purchased a patent on a new drug. The patent cost $28,500. The patent has a life of 20 years, but Calico only expects to be able to sell the drug for 15 years. A. Calculate the amortization expense. $? B. Record the journal for the first-year expense. If an amount box does not require an entry, leave it blank.
The Befort Company field for a patent on a new type of machine. The application costs totaled P12,000. R&D costs incurred to create the machine were P75,000. In the year in which the company filed for and received the patent, it spent P20,000 in the successfuldefense of a patent infringement suit. Required1. At what amount should the company capitalize the patent?2. How would you determine the economic life of the patent?

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