Kingbird had one patent recorded on its books as of January 1, 2017. This patent had a book value of $129,600 and a remaining useful life of 6 years. During 2017, Kingbird incurred research and development costs of $203,500 related to this patent and was sued by a competitor to nullify the patent. On September 1, 2017, the Court found that Kingbird's patent was valid and that its competitor could not use the process Kingbird had patented. The company incurred $65,280 to defend this patent. At what amount should patent(s) be reported on the December 31, 2017, balance sheet, assuming monthly amortization of patents? Carrying amount 12/31/17 2$

Kingbird had one patent recorded on its books as of January 1, 2017. This patent had a book value of $129,600 and a remaining useful life of 6 years. During 2017, Kingbird incurred research and development costs of $203,500 related to this patent and was sued by a competitor to nullify the patent. On September 1, 2017, the Court found that Kingbird's patent was valid and that its competitor could not use the process Kingbird had patented. The company incurred $65,280 to defend this patent. At what amount should patent(s) be reported on the December 31, 2017, balance sheet, assuming monthly amortization of patents? Carrying amount 12/31/17 2$

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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Alliyah Co. was granted a patent on January 1, 20x1. The patent was appropriately recognized at P 800,000 and estimated to have a useful life of 10 years. In 20x3, Alliyah Co. incurred P 100,000 in successfully depending the patent in an infringement suit. However, two months after the suit, the company sold the intangible asset to the plaintiff for P 600,000. It is the company’s policy to recognize full year’s amortization in the year of acquisition and none in the year of derecognition. How much is the gain(loss) on disposal recognized in the company’s 20x3 statement of profit or loss?
In May of 2016, Raymond Financial Services became involved in a penalty dispute with the EPA. At December 31, 2016, the environmental attorney for Raymond indicated that an unfavorable outcome to the dispute was probable. The additional penalties were estimated to be $770,000 but could be as high as $1,170,000. After the year-end, but before the 2016 financial statements were issued, Raymond accepted an EPA settlement offer of $900,000. Raymond should have reported an accrued liability on its December 31, 2016, balance sheet of: a.$770,000. b.$900,000. c.$970,000. d.$1,170,000.
Q3/A/Nieland Industries had one patent recorded on its books as of January 1, 2014. This patent had a book value of $288,000 and a remaining useful life of 8 years. During 2014, Nieland incurred research and development costs of $96,000 and brought a patent infringement suit against a competitor. On December 1, 2014, Nieland received the good news that its patent was valid and that its competitor could not use the process Nieland had patented. The company incurred $85,000 to defend this patent. At what amount should patent(s) be reported on the December 31, 2014, balance sheet, assuming monthly amortization of patents?
Pitchfork Company is being sued by a competitor in a lawsuit alleging patent infringement. Pitchfork's lawyers state that it is possible Pitchfork will lose the suit and be found liable for a judgment costing anywhere from $1,800,000 to $9,000,000. However, the lawyers state that no one estimate is more likely. As a result of the above information, Pitchforks should report: a contingent liability in the amount of $5,400,000, representing the average amount within the range of damages, on its Balance Sheet and disclose an additional contingency of up to $3,600,000 in the notes to the Balance Sheet. a contingent liability in the amount of $1,800,000 on its Balance Sheet and disclose an additional contingency of up to $7,200,000 in the notes to the Balance Sheet. a contingent liability in the amount of $5,400,000 on its Balance Sheet, but not disclose any additional contingency. O a possible contingency of between $1,800,000 and $9,000,000 only in the notes of the 10K.
During 2021, Grouper Corporation spent $152,640 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2021, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $28,080 related to the patent were incurred as of October 1, 2021. (a) Your answer is partially correct. Prepare all journal entries required in 2021 and 2022 as a result of the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record entries in the order displayed in the problem statement.) Date 2021 2021 2021 Account Titles and Explanation Research and Development Expense Cash (To record research and development expenses) Legal Fees Expense Cash (To record legal expenses) Amortization Expense Debit 152640 28080…
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Sydney, Inc., a manufacturer of chocolate-coated mint candy acquired a patent on June 25, 2018, for 720,000. Management expects that the patent will be useful to the company for its remaining useful life of 10 years. On January 10, 2020, the company spent 120,000 in successfully defending the patent against a competitor. In 2021, management determines that the estimated remaining life of the patent should be reduced to only five years, including the current year. The company’s policy is to amortize the cost of Intangible assets using the straight-line method to the nearest month.What is the amortization expense for the year 2021? A. 72,000 B. 108,000 C. 129,000 D. 126,000
18. During 2011, Odyssey Company is the defendant in a patent infringement lawsuit. The entity's lawyers believe there is a 30% chance that the court will dismiss the case and the entity will incur no outflow of economic benefits. However, if the court rules in favor of the claimant, the lawyers believe that there is a 20% chance that the entity will be required to pay damages of P200,000 and an 80% chance that the entity will be required to pay damages of P100,000. Other outcomes are unlikely. The court is expected to rule in late December 2012. There is no indication that the claimant will settle out of court. A 7% risk adjustment factor to the probability- weighted expected cashflows is considered appropriate to reflect the uncertainties in the cashflow estimates. An appropriate discount rate is 5% per year. The present value of 1 at 5% for one period is 0.95. What is the measurement of the provision for lawsuit? * a. 100,000 b. 84,000 c. 89,880 O d. 85,386
During 2021, Culver Corporation spent $169,920 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2021, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $45,360 related to the patent were incurred as of October 1, 2021.
C has initiated a lawsuit against Agency A for recovery of damages when accidentally one of the vehicles owned by the agency collided with the car then driven by C. The Chief Legal Counsel of the Agency estimates from experience that at December 2015, the entity has a 60% chance of winning the lawsuit and thereby avoiding the payment of damages. Furthermore, the counsel estimates that the agency has 20% chance of being ordered to pay C damages of P100,000 and a 20% chance of being ordered to pay C damages of P10,00 Use the facts given in No. 1, but this time assumes that on December 31, 2015, the Chief Legal Counsel of Agency A estimates from past experience that the possibility of losing the case filed by C is remote. -State whether a contingent liability or contingent asset exists.-Explain your answers by stating the criteria of your answers below.
Firoz Corp. obtained a trade name in January 2010, incurring legal costs of SAR15,000. The company amortizes the trade name over 8 years. Firoz, successfully defended its trade name in January 2011, incurring SAR 4,900 in legal fees. At the beginning of 2012, based on new marketing research, Firoz determines that the recoverable amount of the trade name is SAR 12.000. Required: a. Prepare the necessary journal entries on amortization for the years ending December 31, 2010 & 2011.. b. In 2012, will Firoz meet any impairment loss? If yes, prepare journal entry to record the impairment loss and amortization entry on 31st Dec 2012