Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2024, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Instructions Compute the carrying value of patent No. 758-6002-1A on each of the following dates: a. December 31, 2019. b. December 31, 2023. c. December 31, 2026. P11.2 (LO 1, 2, 4) Excel (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufac- ture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occa- sionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. Date 2016-2017 Activity Research conducted to develop precipitator Cost $384,000 Jan. 2018 Design and construction of a prototype 87,600 March 2018 Jan. 2019 Testing of models 42,000 Fees paid engineers and lawyers to prepare patent application; patent 59,500 granted June 30, 2019 Nov. 2020 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 81,500 Dec. 2021 April 2022 July 2026 Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Legal fees paid to successfully defend precipitator patent 42,000 43,000 34,000
Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1, 2024, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after June 30. The company's year ends December 31. Instructions Compute the carrying value of patent No. 758-6002-1A on each of the following dates: a. December 31, 2019. b. December 31, 2023. c. December 31, 2026. P11.2 (LO 1, 2, 4) Excel (Accounting for Patents) Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufac- ture or sell the products and processes it develops. Instead, it conducts research and develops products and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occa- sionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows. Date 2016-2017 Activity Research conducted to develop precipitator Cost $384,000 Jan. 2018 Design and construction of a prototype 87,600 March 2018 Jan. 2019 Testing of models 42,000 Fees paid engineers and lawyers to prepare patent application; patent 59,500 granted June 30, 2019 Nov. 2020 Engineering activity necessary to advance the design of the precipitator to the manufacturing stage 81,500 Dec. 2021 April 2022 July 2026 Research aimed at modifying the design of the patented precipitator Legal fees paid in unsuccessful patent infringement suit against a competitor Legal fees paid to successfully defend precipitator patent 42,000 43,000 34,000
Financial Accounting Intro Concepts Meth/Uses
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ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter10: Long-lived Tangible And Intangible Assets
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Transcribed Image Text:Fields assumed a useful life of 17 years when it received the initial precipitator patent. On January 1,
2024, it revised its useful life estimate downward to 5 remaining years. Amortization is computed for a
full year if the cost is incurred prior to July 1, and no amortization for the year if the cost is incurred after
June 30. The company's year ends December 31.
Instructions
Compute the carrying value of patent No. 758-6002-1A on each of the following dates:
a. December 31, 2019.
b. December 31, 2023.
c. December 31, 2026.
Transcribed Image Text:P11.2 (LO 1, 2, 4) Excel (Accounting for Patents) Fields Laboratories holds a valuable patent
(No. 758-6002-1A) on a precipitator that prevents certain types of air pollution. Fields does not manufac-
ture or sell the products and processes it develops. Instead, it conducts research and develops products
and processes which it patents, and then assigns the patents to manufacturers on a royalty basis. Occa-
sionally it sells a patent. The history of Fields patent number 758-6002-1A is as follows.
Date
2016-2017
Activity
Research conducted to develop precipitator
Cost
$384,000
Jan. 2018
Design and construction of a prototype
87,600
March 2018
Jan. 2019
Testing of models
42,000
Fees paid engineers and lawyers to prepare patent application; patent
59,500
granted June 30, 2019
Nov. 2020
Engineering activity necessary to advance the design of the precipitator
to the manufacturing stage
81,500
Dec. 2021
April 2022
July 2026
Research aimed at modifying the design of the patented precipitator
Legal fees paid in unsuccessful patent infringement suit against a
competitor
Legal fees paid to successfully defend precipitator patent
42,000
43,000
34,000
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