Need help with this question solution general accounting Riverview Corp acquired a patent on March 1, 2024. Riverview paid cash of$180,000 to the seller. Legal fees of $4,500 were paid related to theacquisition. What amount should be debited to the patent account?a. $180,000b. $175,500c. $184,500d. $4,500

Step 1: Definition of Patent AccountThe patent account is used to record the cost of acquiring a…

Answered: Riverview Corp acquired a patent on…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 75P

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When a patent has a book value of $75,000 on the company's books, the company estimates that the future cash flows from the patent are $45,000. The present value of the expected future cash flows is $30,000. The company should record a journal entry that: debits Loss on Impairment for $45,000. credits Loss on Impairment for $30,000. debits Patent for $45,000. credits Patent for $30,000.
Sky Co., organized in 2020, provided you with the following information. 1. Purchased a license for $20,000 on July 1, 2020. The license gives Sky exclusive rights to sell its services in the tri-state region and will expire on July 1, 2028. 2. Purchased a patent on January 2, 2021, for $40,000. It is estimated to have a 5-year life. 3. Costs incurred to develop an exclusive Internet connection process as of June 1, 2021, were $45,000. The process has an indefinite life. 4. On April 1, 2021, Sky purchased a small circuit board manufacturer for $350,000. Goodwill recorded in the transaction was $90,000. 5. On July 1, 2021, legal fees for successful defense of the patent purchased on January 2, 2021, were $11,400. 6. Research and development costs incurred as of September 1, 2021, were $75,000. Instructions a. Prepare the journal entries to record all the entries related to the patent during 2021. b. At December 31, 2021, an impairment test is performed on the license purchased in…
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Windsor Industries has the following patents on its December 31, 2019, balance sheet. Patent Item Patent A Patent B Patent C 2. 3. Year — Initial Cost Date Acquired $52,800 $21,600 $16,800 The following events occurred during the year ended December 31, 2020. 2021 1. Research and development costs of $327,900 were incurred during the year. Patent D was purchased on July 1 for $10,800. This patent has a useful life of 12 years. 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, 2020. The controller for Windsor estimates the future cash flows from Patent B will be as follows. 2022 3/1/16 Future Cash Flows 7/1/17 $2,500 $2,500 9/1/18 Useful Life at Date Acquired 20 years 10 years 8 years
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a. A copyright purchased on January 1, 2020, for a cash cost of $15,70O. The copyright is expected to have a 10-year useful life to Springer. b. Goodwill of $77,000 from the purchase of the Hartford Company on July 1, 2019. CA patent purchased on January 1, 2019, for $56,000. The Inventor had registered the patent with the U.S. Patent and Trademark Office on January 1, 2015. Springer Intends to use the patent for its remaining life. Required: 1. Compute the amortization expense of each intangible for the year ended December 31, 2020. The company does not use contra- accounts. 2a. Show how the expenses related to the three intangible assets should be reported on the Income statement for 2020. 2b. Show how the three intangible assets should be reported on the balance sheet for 2020. (Assume there has been no Impairment of goodwill.)

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Riverview Corp acquired a patent on March 1, 2024. Riverview paid cash of $180,000 to the seller. Legal fees of $4,500 were paid related to the acquisition. What amount should be debited to the patent account? a. $180,000 b. $175,500 c. $184,500 d. $4,500