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Larkspur Industries has the following patents on its December 31, 2024, balance sheet: Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $50,400 3/1/21 20 years Patent B $21,600 7/1/22 10 years Patent C $16.800 9/1/23 8 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $348,900 were incurred during the year. 2. Patent D was purchased on July 1 for $10.080. This patent has a useful life of 12 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: 3. As a result of reduced demands for certain products protected by Patent B. a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: Year Future Cash Flows 2026 $2,400 2027 $2,400 2028 $2,400 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Click here to view factor tables * Your answer is incorrect. Compute the total carrying amount of Larkspur's patents on its December 31, 2025 balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 15.24673 and final answer to O decimal places, e.g. 5,125.) Total carrying amount $ 73.820

Larkspur Industries has the following patents on its December 31, 2024, balance sheet: Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $50,400 3/1/21 20 years Patent B $21,600 7/1/22 10 years Patent C $16.800 9/1/23 8 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $348,900 were incurred during the year. 2. Patent D was purchased on July 1 for $10.080. This patent has a useful life of 12 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: 3. As a result of reduced demands for certain products protected by Patent B. a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: Year Future Cash Flows 2026 $2,400 2027 $2,400 2028 $2,400 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Click here to view factor tables * Your answer is incorrect. Compute the total carrying amount of Larkspur's patents on its December 31, 2025 balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 15.24673 and final answer to O decimal places, e.g. 5,125.) Total carrying amount $ 73.820

Intermediate Accounting: Reporting And Analysis
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 8P
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Larkspur Industries has the following patents on its December 31, 2024, balance sheet: Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $50,400 3/1/21 20 years Patent B $21,600 7/1/22 10 years Patent C $16.800 9/1/23 8 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $348,900 were incurred during the year. 2. Patent D was purchased on July 1 for $10.080. This patent has a useful life of 12 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: 3. As a result of reduced demands for certain products protected by Patent B. a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: Year Future Cash Flows 2026 $2,400 2027 $2,400 2028 $2,400 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Click here to view factor tables * Your answer is incorrect. Compute the total carrying amount of Larkspur's patents on its December 31, 2025 balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 15.24673 and final answer to O decimal places, e.g. 5,125.) Total carrying amount $ 73.820
Transcribed Image Text:Larkspur Industries has the following patents on its December 31, 2024, balance sheet: Patent Item Initial Cost Date Acquired Useful Life at Date Acquired Patent A $50,400 3/1/21 20 years Patent B $21,600 7/1/22 10 years Patent C $16.800 9/1/23 8 years The following events occurred during the year ended December 31, 2025. 1. Research and development costs of $348,900 were incurred during the year. 2. Patent D was purchased on July 1 for $10.080. This patent has a useful life of 12 years. 3. As a result of reduced demands for certain products protected by Patent B, a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: 3. As a result of reduced demands for certain products protected by Patent B. a possible impairment of Patent B's value may have occurred at December 31, 2025. The controller for Larkspur estimates the future cash flows from Patent B will be as follows: Year Future Cash Flows 2026 $2,400 2027 $2,400 2028 $2,400 The proper discount rate to be used for these flows is 8%. (Assume that the cash flows occur at the end of the year.) Click here to view factor tables * Your answer is incorrect. Compute the total carrying amount of Larkspur's patents on its December 31, 2025 balance sheet. (Round present value factor calculations to 5 decimal places, e.g. 15.24673 and final answer to O decimal places, e.g. 5,125.) Total carrying amount $ 73.820
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