Maryanne Printers incurred external costs of $800,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Maryanne with a competitive advantage for only ten years due to expected technological advances in the industry. Maryanne uses the straight-line method of amortization. i (Click the icon to view additional information.) Read the requirements. Record (b) the amortization of the patent for year 1. Journal Entry Date s Cash Date Accounts Amortization Expense-Patents Patents Get more help. Accounts Impairment Loss on Patents Patents Debit 80,000 800,000 Debit Credit 80,000 Requirement 2. Once Maryanne learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry. (Record debits first, then credits. Exclude explanations from any journal entries. For transactions that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other input fields blank.) Journal Entry Requirements Credit 1. Make journal entries to record (a) the purchase of the patent and (b) amortization for year 1. 2 Once Maryanne learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry. Print - X Done More info After using the patent for five years, Maryanne learned at an industry trade show that Super Printers has patented a more efficient printer and will be selling this printer next quarter. Because of this new information, Maryanne determined that the expected future cash flows from its patent were now only $310,000. The fair value of Maryanne's patent on the open market was now zero.
Maryanne Printers incurred external costs of $800,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Maryanne with a competitive advantage for only ten years due to expected technological advances in the industry. Maryanne uses the straight-line method of amortization. i (Click the icon to view additional information.) Read the requirements. Record (b) the amortization of the patent for year 1. Journal Entry Date s Cash Date Accounts Amortization Expense-Patents Patents Get more help. Accounts Impairment Loss on Patents Patents Debit 80,000 800,000 Debit Credit 80,000 Requirement 2. Once Maryanne learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry. (Record debits first, then credits. Exclude explanations from any journal entries. For transactions that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other input fields blank.) Journal Entry Requirements Credit 1. Make journal entries to record (a) the purchase of the patent and (b) amortization for year 1. 2 Once Maryanne learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry. Print - X Done More info After using the patent for five years, Maryanne learned at an industry trade show that Super Printers has patented a more efficient printer and will be selling this printer next quarter. Because of this new information, Maryanne determined that the expected future cash flows from its patent were now only $310,000. The fair value of Maryanne's patent on the open market was now zero.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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thanx for help
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Transcribed Image Text:Maryanne Printers incurred external costs of $800,000 for a patent for a new laser printer. Although the patent gives legal protection for 20 years, it was expected to provide Maryanne with a competitive advantage for only ten
years due to expected technological advances in the industry. Maryanne uses the straight-line method of amortization.
i (Click the icon to view additional information.)
Read the requirements.
es
Record (b) the amortization of the patent for year 1.
Journal Entry
Date
Cash
Date
Accounts
Amortization Expense-Patents
Patents
Get more help.
Accounts
Impairment Loss on Patents
Patents
Debit
80,000
800,000
Debit
Credit
80,000
Requirement 2. Once Maryanne learned of the competing printer and adjusted the expected future cash flows from its original patent, was this asset impaired? If so, make the impairment adjusting entry. (Record debits first,
then credits. Exclude explanations from any journal entries. For transactions that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave I other input fields blank.)
Journal Entry
Requirements
Credit
1. Make journal entries to record (a) the purchase of the patent and (b)
amortization for year 1.
2. Once Maryanne learned of the competing printer and adjusted the expected
future cash flows from its original patent, was this asset impaired? If so, make
the impairment adjusting entry.
Print
Done
More info
X
After using the patent for five years, Maryanne learned at an industry trade show
that Super Printers has patented a more efficient printer and will be selling this
printer next quarter. Because of this new information, Maryanne determined that
the expected future cash flows from its patent were now only $310,000. The fair
value of Maryanne's patent on the open market was now zero.
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